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Clients concerned about advisers’ understanding of risk tolerance

Clients concerned about advisers’ understanding of risk tolerance

Almost a third (29 per cent) of clients are not convinced their wealth manager has understood their attitude towards risk when it came to investing, research has found.

According to research commissioned by Oxford Risk, only 69 per cent of retail investors who have used wealth managers felt their advisers used effective fact-finding methods to understand their investment needs and financial circumstances.

One in 20 felt the methods were ineffective, and one in four (26 per cent) were unsure about their effectiveness.

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The research, which was conducted by Consumer Intelligence among 1,036 adults in August, also found that more than three-quarters (77 per cent) of retail investors, who have used a financial adviser in the past five years,  said they felt the advice received was tailored to them.

However, around 6 per cent said it was not tailored to them and 17 per cent were unsure. 

Greg B Davies, head of behavioural finance at Oxford Risk, said: “It is encouraging to see so many clients of wealth managers happy with the service they are receiving, but our findings reveal a significant minority who feel it could be improved.  

“As clients become more demanding in terms of service levels and quality of advice, wealth managers need to embrace technology to meet these needs.”   

Meanwhile, 77 per cent of polled investors said the advice received from their wealth manager had been consistent over time, with just 3 per cent disagreeing, and 19 per cent saying they did not know.      

Justin King, chartered financial planner at MFP Wealth Management, said: “I am concerned at the 17 per cent who were unsure and 6 per cent were not. Why did they not revisit their adviser for a further discussion? Each year we reconfirm the suitability of investments after a regular meeting. How can they continue to be unsure?”

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