Chris Mayo, investment director for Kent-based Wellian, said that before trying to cut costs, advisers should adopt a strategy for segmenting or categorising their client base according to the ongoing service they require.
He said clients could be categorised into three groups, from those needing a very close relationship with the adviser, to those whose requirements could as easily be serviced with a small amount of the adviser’s time.
Once advisers have identified the most suitable areas of business to outsource, he said that IFAs should consider the use of platforms, DFMs and the role of compliance.
Mr Mayo said: “One of the best ways to cut costs is to mig-rate all client assets onto one or more platforms. The platforms have usually negotiated the best price with the fund groups on different funds.”
Outsourcing in-house compliance to a third-party contractor offering on-demand services and expertise could also make considerable cost savings.
Mr Mayo added: “However, before outsourcing any part of the business, it is vitally important to review your client base and do your research thoroughly when deciding which DFMS to partner with.”
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Colin Campbell, director and financial planner at Edinburgh-based Innovate Financial Services, said: “We have chosen an external firm to take care of compliance, as they offer a bespoke service that helps us do business efficiently. But we have ended relationships with firms that have not been focused on us.”
