The Value of Advice – an insiders guide

The Value of Advice – A PORTFOLIOMETRIX WHITE PAPER

Excerpt:

Ever since the Retail Distribution Review (RDR) came into effect in 2012, advisers have been asked to explain, and potentially justify, their fees. This is a favourite topic for the industry press to write about, with multiple articles published this year alone (see appendix).

Historically, advisers tied much of their value to fund picking or investment performance. There has been a shift away from that approach in recent years as advisers became wary of aligning their value with something they couldn’t control. Many were also put off by the risks and inefficiencies of running portfolios, opting instead to partner with an investment professional via DIM, DFM or MPS.

This allowed them to focus on financial planning, spend more time with their clients and grow their businesses. However, there is still a widely held view that advisers could be better at explaining the value of what they do for their clients.

So why do some advisers find it hard to articulate the value that they provide?

Firstly, advisers get pulled in many different directions every day, so finding the time to properly define their value proposition can be a challenge. It is also daunting to evidence something that can’t always be captured with hard data.

In this guide, we’ve looked at industry studies, spoken at length to advisers and surveyed a wider group to highlight all the areas where value can be added. The aim is to provide a best practice overview to help advisers assess and articulate their value to clients.

It may also flag things that your peers are doing that you aren’t. And we provide the possibility of analysing what your clients believe about the value of advice.