Despite the rise of robo-advice in the past five years, face-to-face financial advice looks very much in demand, according to research from AXA. On average, people tend to use three different sources when looking for financial advice – and financial advisers top that list, with 43% identifying them as a key source. In second place is the internet as cited by 42% of respondents, while information provided by banks, savings and investment providers was the choice of 30%.
Source: Ignition House
In a recent survey of FT readers carried, this view seems to be reaffirmed. The qualities clients really value in a financial adviser are the three T’s – transparency, trust and tailored advice.
Without doubt, transparency was considered the key to a great relationship – and conversely, a lack of transparency was also the biggest turn off.
FT readers said they expected information about fees and charges to be “crystal clear” with many objecting to the “ad valorem” model of charging an annual percentage fee for assets under management.
Source: AXA IM
On the question of value for money, many of the detailed responses (from over 400 FT readers) questioned the practice of “restricted advice” – where an adviser can only recommend products from a specific range of funds.
Similarly, most had found their current adviser through word-of-mouth referrals, often from family members, friends or fellow professionals, and were thus assured of their track record.
Top 10 things advisers are asked about by clients (according to FT readers’ survey)
1) Pensions and retirement planning
3) Tax planning
5) Recent market volatility concerns
6) Investment returns and growth
7) “Am I doing the right thing?”
8) Financial planning
9) Inheritance tax
10) Risk mitigation and capital preservation
Clare Farrell, director and IFA at Northfield Wealth says: “As much as technology definitely needs to be embraced in our industry I think it has some way to go before it is the chosen method for the majority looking for financial advice.
“At annual reviews I always ask my clients if they have logged onto their online platform to get their valuations, 70% say no, 10% haven’t even opened their paper statement. They pay us, as financial advisers, to manage this for them and in our case we work with the client how they want to work.
“If that is face-to-face, that is what we do, if they prefer phone, that’s fine. Although we have the facility I have not yet been asked to do a client meeting via Skype or any type of video calling, but I can see that this could become more popular in the future.”
Farrell concludes: “As a nation we are not yet comfortable enough doing everything ‘online’, I have no doubt technology will propel us forward to use it more in the future, but my opinion is we are not quite there yet. I am really hoping that it will open doors to make access to advice easier for those with less to invest or those that want to start investing small monthly contributions. Right now the large upfront charges make most offerings unattractive to those starting small.”
Sabuhi Gard is an investment writer for Incisive Works
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