Price versus value: the 21st century financial advisory conundrum

Financial Advisory

27 November 2018

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  1. Who are BMO?
  2. The true costs of investments.
  3. The value of advice.
  4. The FCA applying pressure with CP17/18 and Consultations to provide good value for money and spot persistent underperformance.
  5. Hybrid advisers using technology and face to face to provide efficiencies and value.

Key Challenges:

  • Differentiation of what represents good value is it all about high returns?
  • What are the FCA looking at, they want a solution for the masses, and greater price transparency.
  • How can Investment Managers justify their charges.
  • To keep charges down should everybody just avoid active managers.
  • Do advisers feel confident that they can justify their charges.
  • How do advisers demonstrate their value when they are about so much more than just the performance of investments?

Conclusions and solutions:

  • Advisers need to be able to articulate their total service/value to clients. Suitability reports are already too lengthy and just focussed on the investments. What about the tax savings, the reassurance and peace of mind how do you include that within the already lengthy document or do a separate document.
  • Advisers should seek investments that are reasonable in costs but still offer the opportunities for growth or ongoing returns that clients require.
  • Advisers must utilise technology to improve efficiencies and keep costs down but at the same time provide the personal services that their clients need and value.
  • It is unlikely that the advisers will ever be able to offer mass market advice.

Expert: Mark Parry, BMO