VouchedFor recently released its list of the top-rated advisers in the UK. These are advisers who receive the highest number of positive reviews from clients. The list includes 1,172 advisers from 737 different firms, be that regional directly authorised firms, large national firms or networks.
The diversity of the list serves as an important reminder of the necessity of different kinds of firms to suit diverse client needs and adviser aspirations. Clients need to know the firm they choose will be a good fit for them. From their perspective, there are probably only two kinds of firms rather than three: a national brand name or a boutique regional.
Those who pick a national firm are more likely to derive comfort from the consistency of advice and a trusted brand. Clients are often referred to these firms because of their scale and corporate reputation.
On the flipside, those who pick a regional boutique are likely to derive comfort from the intimate relationship with an adviser they trust thanks to their local presence and knowledge. Clients are often referred to them because of the adviser or company’s reputation.
But what about incoming advisers? How do they decide on which kind of firm to work for?
A larger national firm offers advisers a strong brand, a bigger marketing budget, and training opportunities to further their knowledge and expertise.
They also tend to have robust frameworks and consistent processes, which allow advisers to service more clients.
For advisers that thrive in a more intimate business where they can be mentored, a directly authorised regional firm may be a better fit. These advisers also maintain more of an entrepreneurial spirit.
A network sits as a medium between the two. It provides a secure environment, with a robust and effective oversight framework designed to keep clients and businesses safe. This enables advisers to trade with confidence and plan for the longer term, but also allows them to keep their independence.
The diversity of these firms and ways of operating should be celebrated, because there is no right way to offer advice. In fact, these advice firms are more similar than different. They thrive thanks to intimate one-to-one relationships between their advisers and clients.
The new kinds of firms coming to market, including robos, banks and insurers, will have fundamentally different adviser/client relationships.
We know there is an advice gap. In 2017, there was just one adviser for every 2,550 adults. All these models, the ones discussed here and new entrants coming to market, are trying to close that gap.
They complement each other in this goal as they attract different kinds of advisers and clients.
So we must put less weight on the different kinds of advice firms, and more focus on quality of service and client outcomes, because advisers of all kinds make a significant and quantifiable difference.
Andy Thompson is chief executive of Intrinsic