Director of B-Compliant Vicky Pearce on how advisers can be future ready for the challenges ahead.
Catch her speaking at the Money Marketing Interactive conference on 12 September in Harrogate.
How can advisers show they are value for money?
By educating clients as to the benefits of taking financial advice. After all, it’s not just about the returns that a client gets from their investments, they add value through mitigating tax, providing diversification across products and investment to reduce risk and improve returns, provide the client with a glimpse into the future with cash flow modelling helping them establish and achieve financial goals. Those clients that fully understand what their adviser does for them, understand how valuable their advice is.
What soft skills are needed for a modern adviser and why?
With the complaints culture that we, unfortunately, have in this industry today, all advice is at risk of being challenged, and when it is, the information held on a file is key in establishing the suitability of the advice. A key soft skill is to be able to obtain this information. Clients can be elusive when providing information about what they want to achieve and why, so the ability to really drill down asking open ‘what, when, why and how’ questions when discussing risk, circumstances and objectives, listening to their answers, empathising and providing appropriate challenge to their beliefs when required, are all skills that are crucial in the modern advisory world.
Will one-man bands continue to be a prominent feature of the market, or will provider plays into distribution take over?
This is an interesting question. Whilst consolidation of existing advisory firms will continue, the intervention of providers and the return of the banks to the advice space will provide consumers with a range of solutions. I think it is likely that sole-trader directly authorised advisers will continue to have an important role, this will be dependent on their ability to keep up with advancements in technology and find a solution to the ever-increasing burden of regulatory change. Advisers who offer a personalised high-quality service, being agile with their service offering and build a team to support them will continue to prosper.
Will fund, platform, or advice charges really cave to downward pressure?
As discussed above, clients are happy to pay if they feel they are getting value in return. The old car analogy comes to mind, a Mini and a Bentley both do the same job getting you from A to B, but their initial and ongoing costs are very different, the person looking to buy a Mini isn’t going to go and look at a Bentley, and vice versa. The implementation of MiFID II disclosure requirements has made clients more aware of what they are paying and where they don’t feel they are getting value for money; they will likely be questioning the chargers they are paying and look elsewhere.
What will the advice profession look like in 10 years’ time?
In 10 years time technology will play a bigger part in the advice process, particularly for Millennials and generation X. Access to advice will be easier for less affluent individuals through robo-advice and online meetings, providing consumers with more choice. Face to face advice will still be available but it will be at a premium for those who want and can afford to pay for it.