Advisers underestimate extent to which clients care about returns

When asked how important investment performance was for their clients, 47 per cent said it had "some impact but was far from being the most important thing".

Meanwhile 23 per cent of advisers said investment performance had "no impact" or a "small impact" on their clients' perception of value.

But when clients were asked how important investment performance was when they considered overall value for money, 50 per cent of them said it was "the most important factor".

Another 42 per cent said it was "important, but not the most important factor", leaving only 5 per cent who said it was "not hugely important".

This misalignment is worrying on a number of levelsThe Meaning of Value report

The report said: "This misalignment is worrying on a number of levels. Firstly, as experienced professionals within the sector we know that investment performance is something that no one can predict, and while an adviser can have some influence on the overall outcome they can never directly control it.

"But perhaps more importantly is how this relates to the whole question of value. If this is how consumers perceive the value of advice, more work is needed to demonstrate what an adviser will actually do for them."

The report found satisfaction levels are broadly high, with levels of net dissatisfaction in the single digits.

But clients are most dissatisfied with their advisers on the issue of fee structure.

When clients were asked if they were satisfied that their adviser had a clear fee structure so they knew what they were paying for, 7 per cent - which was the highest level of net dissatisfaction.

The highest level of net satisfaction was when clients were asked if their adviser had "relevant skills and knowledge" and when they were asked if their adviser was "approachable and easy to talk to".

Jamie Jenkins, director of policy at Royal London, said: “Measuring value is more an art than a science. The research we have carried out with the Lang Cat has shown that different people value different things when considering products and services, and it is often multi-faceted and nuanced. The temptation is to boil everything down to price because it’s more tangible, but that is only part of the ‘value for money’ equation.

“If we are truly going to adopt the spirit of the consumer duty, then we need to develop a better understanding of what people really value. Only then can we forge a step-change in improving customer outcomes. By developing this research, we aim to start that debate.”

Meansuring value is more an art than a scienceJamie Jenkins, director of policy at Royal London

In terms of what clients value from advice as a whole, advisers and clients were broadly aligned.

Advisers believe their clients value peace of mind (66 per cent), helping them reach financial goals (40 per cent) and clear communications (38 per cent).

For clients, clear communication was among the top five most valued traits in a financial adviser. But the most important was that their advice or recommendations were in the client's best interests (32 per cent) followed by having relevant skills and knowledge (31 per cent).

Mike Barrett, consulting director at the Lang Cat, said: "This benchmarking exercise is not only good business sense but is now a vital part of consumer duty. However, the research also shows how difficult it can be for advice firms to evidence fair value.

"Value is subjective, and consumers will often combine multiple factors to make their overall value judgement. Some of these factors, such as price and investment performance are easily measurable, but other factors such as peace of mind are less tangible. The regulator should help advisers with good practice examples showing how these aspects should be measured under consumer duty.”

damian.fantato@ft.com