Financial Advisory

Financial Advisory

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Expert: Keith Hare, Benchmark Capital

Facilitator: Paul Miles, SilverBack Consulting

Sponsored by: Schroders

The expert started the session by suggesting that Adviser Firms should “break up their propositions” and then introduced a list of the possible components. He then asked the audience to identify what they considered to be most valued by their clients.

The list is as follows:

  • Trust/integrity
  • Competence/experience/expertise
  • Relationship/personal skills 

  • Being available when required 

  • Delivering investment returns for clients 

  • Helping to educate clients on the importance of saving 

  • Being independent 

  • Being chartered 

  • Being small/running my own business 

  • Being large/part of a large group 

  • Helping clients plan their income in retirement 

  • Helping clients minimise their tax bill (legally of course!)

  • Helping clients align (and keep aligned) their investments with the appropriate level of risk 

  • Providing clients with a visual plan/cashflow model 

  • Regular communication and contact on relevant issues 

  • Building a plan that is specific to a client’s individual circumstances 

  • Something else? 

Both groups identified the importance of their responses matching that of their clients – perhaps this is not always the case.

The overwhelming top three were: Trust, Piece of Mind, and Continuity of Relationship. However, it is difficult to quantify!

The discussions then moved to Fixed v Hourly Rate Fees. Both Groups stated they only charge Fixed Fees, some had tried Hourly Rate Fees but they really struggled to work it as a model and had switched to Fixed Fees.

Participants shared ideas:

  • Create an Audit Document, which measures everything, client sees what they get, and it acts as a good compliant process.
  • Create a Client Advisory Board – often provides opportunities.
  • An innovative idea from one firm was to introduce a Jigsaw Puzzle based on a system of RAG for each area of advice – Red = not good, Amber = work in progress, and Green = good. Once set up the jigsaw was referred to in all communications regarding clients’ objectives and acted as a simple way to review progress.
  • Charge monthly retainers and fixed fees for any advice.
  • Calculation of the fixed fee is based on a ‘risk premium for the type of advice’, complexity of advice, and the number of wrappers. Experience has seen an increase in income over charging a percentage of AUM.
  • Russell Investments provide a template for a ‘Client Vision Document’, a kind of Road Map.
  • Profitability can be increased by utilising modern technology to support processes.
  • Clients do not know what they want when they first engage!

It was suggested that there may be pressure in the future to providing ‘Commoditised Advice’ BUT not for full blown Financial Planning.

The groups then looked at the issue of continuing to look after the children once ‘Mum and Dad’ had died. One participant said: he had introduced free advice to family members under the age of 30 on the basis that the only help they would require was a mortgage and ISA.