Many ways that financial advisers add value

Many ways that financial advisers add value

There is little doubt that financial advisers can add real value to clients e.g. clear goals, peace of mind, financial security and confidence in the future.  


With the growing transparency of fees (platforms, portfolios and advice) the need to show this value is growing. The FCA has expressed more than a passing interest, and a Which? Survey suggested the average ongoing advice fee was 1.3% per year and £3,000 up front for pension advice.


Below are some examples of how advisers can potentially add value for clients:


  1. Help clients determine the rate at which they need to save at to meet their long-term needs. Value: confidence in the future 


  1. Assess how much risk clients should take and need to take to achieve their goals.  Value: peace of mind 


  1. Help couples determine how they combine their objectives together into a single plan in a cost effective and tax efficient way. And ensure that everyone is involved in the decision making. Value: peace of mind 


  1. Help clients determine how much money they will need to retire and when they can retire. Value: peace of mind 


  1. Look at old final salary or “frozen” pensions from previous employments. Transfer values are at all-time highs (bond yields at all-time lows). Value: clients may be able to retire earlier, take more tax-free cash, increase life cover / flexibility, plan for IHT 


  1. After clients retire, help them figure out how much they can / should take out for living expenses, and keep updating the numbers as their circumstances evolve.  Value: potentially prevent them from running out of money 


  1. Help clients determine what kinds of insurance they need, how much, and the best way to buy cover at low cost.  Value: peace of mind and potential savings 


  1. Make sure life insurance is written in the right trust. Value: benefits are paid quickly to the right people in as tax effective manner as possible – potentially saving tens of thousands of pounds in tax 


  1. Help clients put the right asset classes in the right amounts in their portfolio. Value: reducing risk and potentially boosting your investment returns 


  1. Determine the most efficient way to divide clients’ investments between tax-exempt, tax-deferred and taxable accounts (ISAs, bonds and GIAs) Value: boost after-tax returns 


  1. Regularly rebalance assets. Value: to help control risk and potentially add to clients’ returns 


  1. Select the new generation of low-cost index funds to reduce a clients’  expenses. Value: could add 0.5% or more per year to returns 


  1. Help clients choose the right ISA for next year. And making sure they put the most tax efficient assets in their ISA. Value: every little extra return helps 


  1. Help clients select funds and contributions into their employer’s retirement plan. Value: potentially tens of thousands of pounds 


  1. Harvest tax losses and gains when appropriate. Use CGT allowance, offset gains and losses. Value: potentially tens of thousands of pounds 


  1. Help with estate planning and long-term care provision. Make a will. Sort out powers of attorney. Value: potentially tens or even hundreds of thousands of pounds in the form of additional benefits to heirs 


  1. Prevent clients from making emotional investment mistakes during inevitable market volatility, both on the upside and the downside. Value: potentially tens of thousands of pounds 


  1. Help clients make decisions about charitable giving. Value: potentially boosting what the charity receives from the gift 


  1. Help clients make decisions about giving money to their children, grandchildren or others. Value: potentially priceless 


  1. Help client with setting aside money for education for children, grandchildren or others. Value: a long-term gift that can last for decades 


  1. Help a client’s children to get a smart start as investors. Value: assuming they learn well and follow through, this is priceless 


If you’d like to hear more on how advisers can add value contact DAN