18 Nov 2019
Square Mile recently surveyed a number of UK Financial Advisers to ascertain more information on how they run their businesses, spend their time, construct their investment proposition and where they see most growth in the future.
The results were stark with some results unsurprising and others far less expected. Perhaps the most disappointing but least surprising is that the number one activity that Advisers take part in is administration, yet the area they feel they add most value to their clients is being in face-to-face meetings. There is an obvious disconnect here and so the message is clear for all to see that the administrative burden is stopping Advisers from adding more value to their clients.
Perhaps more surprising is that Advisers feel that they can add most value in the Investment side of matters. This scored more heavily than tax planning or cash flow planning. This could well be as a result of the difficult markets we are experiencing at the moment and that clients are nervous and rely on their Advisers for guidance and comfort. However, looking through the results, it could be deemed that Advisers, although adding value in this area for clients now realise that this isn’t necessarily an area of expertise for themselves.
The survey clearly identifies that the use of third-parties assisting in the investment side of matters is rife. Far less than half of Advisers are now running their own Centralised Investment Propositions and are happy to bring in third parties for discretionary portfolios, fund research / panels and general governance such as sitting on their investment committees. This suggests that Advisers are not only using this expertise to assist with getting better client outcomes but are promoting the use of external expertise as a virtue to their clients and promoting it as a value add. This assumption would back up another of the survey’s key messages which is that Advisers see regulation as the biggest risk to their business. Out-sourcing this regulatory and operational risk to experts would appear to be a trend which is set to continue.
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