A team approach adds value!

What do clients value from their financial adviser? Many articles have covered this and usually reach the same conclusion that ‘beauty is in the eye of the beholder’. Value is assessed by the client,  is subjective and based on a variety of expectations and perhaps influenced by how value was positioned with them at the outset.

However, a new survey from Cerulli Associates1 perhaps offers a different insight. They asked clients what the key factors were when selecting a financial adviser. The top three responses were:

  1. Transparency in interactions
  2. Taking time to understand their needs, goals and risk tolerance
  3. Monitoring portfolios and letting them know about any problems and opportunities

The first two points are probably no surprise and make perfect sense. Clients want clarity and honesty in their interactions and understanding needs, goals and risk tolerance is at the heart of any financial planning relationship. Last year gave us the perfect example of all this working in practice. Hypothetical questions about risk tolerance and capacity for loss for many became a reality while understanding needs and goals, ensuring that financial plans actually stayed on track, were viewed as critical.

However, let’s explore the third factor in more detail. Last year was like no other in terms of volatility. After over 10 years of a bull market, many clients experienced the pain of significant losses in their portfolio. This came at a time when real financial stress was being felt in other areas of their lives such as job security and the impact on their regular income. Mortgage holidays, disinvesting from pension pots or ceasing contributions and other strategies were deployed.

Whilst market recovery has helped some clients’ financial position,  it has also shone a light on the requirement for financial advisers to closely monitor clients’ investment portfolios and stay in touch. That requires two activities: advisers maintaining client contact and investment managers delivering appropriate information and support. This needs to be relevant, delivered  in ‘client friendly language’ and supported by people who are available to respond to any enquiries.

However, the research dug deeper on this point and asked about expertise in managing portfolios. Only 29% of clients felt that their adviser had the highest level of expertise to run their portfolio and identified that ‘a team approach’ actively benefits them.

At Schroders, we listen to financial advisers and their clients; adopting a team approach is important to us too. We firmly believe that working with financial advisers and delivering a range of investment solutions which can support a broad range of client outcomes, contributes to teamwork. It is important that we provide a wide choice of solutions packaged as funds or model portfolios, across different risk profiles and styles - active, blended and of course sustainable - all at a competitive cost. This all has to be supported by a communication and service proposition delivering client reporting, market commentary and thought leadership content. Working with advisers to create customer value is a team approach and our message is quite simply ‘combining your strengths and ours’.

1 ThinkAdvisor, 8 April 2021 - https://www.thinkadvisor.com/2021/04/08/top-3-qualities-clients-want-in-their-advisor-cerulli/