This is a problem that really came to the fore with the introduction of the retail distribution review.
Before 2013, financial advisers did not have to present clients with a bill, meaning that people didn’t have a benchmark against which to hold their advisers to account.
”I’ve paid you £x.xx and you’ve delivered me £y.yy – please explain why I need you.”
Or
“I’m paying X% and my investments are not performing as I expected. Why not?”
So, discretionary investment manager Portfoliometrix has published a paper designed to help advisers assess, define and articulate the value they deliver to their clients.
A roadmap
Titled ‘The insiders’ guide to the value of advice’, the paper brings together industry studies, adviser views and case studies together with the results of an adviser survey into what they feel is the most valuable part of their service.
The goal is to provide a best practice overview to help advisers produce a tangible process for clearly communicating the value they bring their clients, Portfoliometrix said.
Our survey said
The survey carried out with 194 advisers found that soft skills scored the highest and took the top three spots.
Empathy was the standout winner with 76% of respondents including it in their top five.
Understanding a client’s life goals secured second place (49%), with simplify and peace of mind sharing third place with 47% of the votes.
Other top scoring elements included:
- Building a personalised plan (41%)
- Consistency and continuity (39%)
- Behavioural coaching (36%)
Not so clear cut
As has been evidenced in the past with similar research, there can often be a disconnect between what advisers think their clients value and what it is they actually value.
The survey found some quite surprising responses among the lower ranking elements:
- Advice on noninvestment products (4%)
- Cost conscious (6%)
- Consolidate (6%)
- Consider the whole family (6%)
- Helping with life events (11%)
Ben Peele, managing director of Portfoliometrix UK, said: “The FCA is increasing its focus on transparency and how advisers protect consumer’s best interests.
“While there’s currently no formal requirement for advisers to evidence the value they add, the direction of travel looks to be that way.
“Evaluating and quantifying value will not only provide the sort of evidence the regulator may want to see, it will help the adviser understand if there are any gaps that may need to be filled.
“Another aspect we cover in the paper, which is definitely worth consideration, is for advisers to survey their own clients to assess what they value from the relationship.
“This can be very useful for flagging areas where advisers can strengthen their offering and ensure they keep clients for the long term,” Peele added.
The Insiders’ Guide to the Value of Advice is available as a free download from the Portfoliometrix website.
