One of the fundamental questions for advisers is how they demonstrate their worth to clients. This is crucial if they want to attract new customers to the business, as well as keeping existing clients happy that they are getting value for money.
FCA regulations may stipulate key feature documents and a list of adviser charging options, but these may mean little to clients without a clear explanation of how they can benefit from the adviser’s expertise and professional services.
Six advisers weigh in on how they demonstrate their value to customers.
Red Kites Money financial planner Gill Cardy
I used to work with a practice which was very enthusiastic about value-based fees. But to me this doesn’t seem to encourage a sensible, fair, consistent charging structure in a business, as you could do a great deal of work which isn’t really valued by the client.
Personally I prefer to stick to a more factual way of describing what I do, and why the various components, and their outcomes are an important service. If I’m good at understanding my clients then it’s likely this will overlap with their definitions of value, but it keeps it factual.
A common phrase used by many advisers is “we remove the hassle”. This is a way of describing some of the administration work they do. But I’m not sure this is fully understood or valued by all clients. It’s hard to explain how much that’s worth until you’ve actually tried to interact with product providers yourself.
This approach can lead to problems with percentage-based fees, unless what you do noticeably increases as the sums the client pays you increase thanks to accumulating assets and market rises.
Thameside Financial Planning director Tom Kean
When our clients visit our Henley office, we spoil them, and make them feel special; it’s the least we can do for them taking the time to visit us.
We offer an initial meeting at our expense, to make sure that the clients are comfortable with us, and we feel we can work together. They get the opportunity to meet the rest of the team.
At this stage we discuss fees and set out the various ways we can add value.
This includes details of how we work and we give them a demonstration of our cash flow modelling — which is included as a standard part of our services.
We also explain, if necessary, that while some are, not all clients are necessarily best served by our proposition. We have a new automated advice service for those who still want to engage but at a basic level for a more modest level of fees.
We have a corporate brochure online which goes into more detail, and we even have a hard copy version which is still popular with clients.
Aspect 8 financial planner Claire Walsh
I think that all advisers approach this differently. Where we, as advisers, perceive that we add value, and what clients actually value are not necessarily the same thing.
What my clients value is being able to open up to me and ask questions without feeling scared of looking silly. They know I have the technical knowledge and skills, but that I can also understand them as people too, and empathise and explain things in a way that they will understand.
I will be honest with them and explain clearly that I am giving them advice in their interests. I don’t try to curry favour with them or simply tell them things I think they want to hear. If we do differ in opinion, I let them know that I will be supportive of their decisions and try to help them achieve their goals.
Philippa Gee Wealth Management managing director Philippa Gee
We demonstrate our value by prioritising our existing clients. As a result we have a nine month waiting list for new clients.
We don’t produce general newsletters but instead provide bespoke information and updates for each client individually. This relates to their holdings and their circumstances.
Each client will get a written review at least once a year. Completing this review is a two-week process. Clients can opt to have a more frequent review if they prefer. However, we also make sure we regularly keep in touch with clients between these formal reviews, particularly when investment conditions change. The recent geopolitical risks we’ve seen has been a good example of this, and has prompted us to talk directly and offer reassurance to many of our clients.
Informed Choice managing director Martin Bamford
Advisers need to go above and beyond to demonstrate value to clients to keep them happy, and proactively deal with any fee objections.
It’s no longer enough to simply do the basics; financial planning and investment management. Advisers need to demonstrate that they can be behavioural coaches and co-ordinators, sharing information with other professional advisers and helping smooth the path when clients make significant financial decisions.
Advisers can also demonstrate added value through financial education. This needs to be for the client and their family members, especially the next generation who will be the ultimate recipients of their wealth.
Education can take different forms, including regular blog posts, email newsletters, sharing thought provoking content on social media, and even podcasting.
Chase de Vere chief executive Stephen Kavanagh
The focus for advice firms is to add value to justify their fees. In the past, too many advisers spent too much time on activities that weren’t perceived by clients to add any value at all.
Examples of this include administration work, which could be handled by administrators, paraplanners or these days more efficient technology. Similarly, why spend time researching investment funds when investment professionals will do this much better.
At Chase de Vere we stress that our advisers focus on financial planning and managing client relationships. These activities make the best use of the technical knowledge, skills and experience of advisers and are the areas most appreciated by clients.
Clients want an adviser who is knowledgeable and provides a high level of service and who they trust to help them to meet their financial goals.