Financial advice is dear – that’s a fact. The benefit of good advice is indisputable; focus, planning, control and peace of mind being just some of the positives.
But, with the payment for advice now more transparent, it is inevitable that clients begin to analyse what they are actually getting for their money.
Last year’s JPMorgan Wealth Management Report cited investment performance as the biggest reason for client dissatisfaction.
And, of the top five reasons why a client would leave an organisation, poor investment performance was No. 2 in the Global Private Banking and Wealth Management Survey, published by PwC in 2013.
With the payment for advice now more transparent, it is inevitable that clients begin to analyse what they are actually getting for their moneyYou may have other ideas; you may entirely disagree with these findings. But when it comes down to it, it seems your clients do agree – investment performance is key.
Strangely, I don’t really see this as a high priority when advisers discuss where they believe they add the most value to their clients.
Why then do advisers continue to view the more behavioural aspects of cashflow modelling as the greatest benefit in isolation; this is clearly at odds with the people who foot the bill. Investment returns power the financial planning; without the returns, all the planning and cashflow modelling is for nought.
The question is, are clients’ expectations of your own investment expertise greater than reality? If they knew what you know, would they pay your fee?
Andrew Alexander is head of investments and product strategy at Three Counties
