The Findings - Winning Advisers, Tuesday 13 October 2015 - Tylney Hall, Hampshire
Sponsor Introducing: James Stewart, Vanguard
Facilitated and written by: Malcolm Kerr and Sara McLeish, EY
Headline finding 1:
“Adviser alpha” is an attempt to articulate the adviser value (and justify ongoing fees). It is defined as “the value (as a percentage) that the adviser adds to their client above what they would achieve on their own”. Vanguard estimates that the adviser alpha is worth about 3% per annum.
Headline finding 2:
There tends to be an over focus on investment performance – this is only part of the picture and actually the real value can be delivered in less tangible areas such as peace of mind, goal setting etc.
Headline finding 3:
A lot of the advisers still lack confidence – many clients are happy to write cheques and pay fees but some advisers still lack the confidence to explain their fees and articulate their value proposition.
Headline finding 4:
Many participants agreed that most non-advised investors will get the asset allocation / risk profile wrong.
a) Being a risk manager rather than a return seeker and helping educate clients about risk delivers genuine value.
b) Most clients arrive with a portfolio that doesn’t match their ATR and is just a collection of ‘best buys’!
Headline finding 5:
Investors tend to chase the previous years’ top performing funds and to time the market – there is real value in helping investors to ‘do nothing’; to buy and to hold and not to react emotionally. The phrase “stand there and don’t just do something” was raised.