There are many areas in which financial advisers add value to their clients.
We have broken them down into three ‘branches’, with several individual elements in each branch. In this blog we look at the Confidence branch.
The Confidence branch looks at how advisers can build trust, deliver coaching and help clients achieve their goals. We have outlined a little more detail about some elements below:
- FSCS and PI insurance cover – advisers can look at how best to maximise client protection under the Financial Services Compensation scheme (FSCs) – so investments are “safer”.
- Our experience – advisers have many years of experience in dealing with the ups and downs of financial life – they are there for their clients when they retire or receive a windfall. They can help with a business sale, planning a legacy or receiving an inheritance. It is good to be able to talk to someone who has been through it before – that is what advisers are there for.
- Coaching behaviours – humans have evolved to survive over many thousands of years. Unfortunately, we have also learned some bad habits and biases in the process. Many of them we are not even aware of. We buy high and sell low, we value the near-term more than the long-term, we hold onto investments that have fallen, we believe information that reinforces our own views. Part of an adviser’s role is to act as a coach – helping clients to avoid these mistakes and guide them to a better future.
- Holding clients’ hands through difficult times – divorce, death, redundancy and making wills are all stressful times. Advisers have experience and expertise and understanding to assist and guide clients through them. Advisers are there when clients need them most.
- Expertise and qualifications – advisers have built their expertise over many years. They are regulated by the Financial Conduct Authority (FCA). They are required to have a Statement of Professional Standing (SPS) issued by an independent professional standards body. And they are required to maintain minimum standards and conduct regular Continuing Professional Development (CPD). Keeping up to date with all financial matters allows advisers to give their clients the best possible advice.
- Achieving clients’ goals – Advisers help work out and achieve clients’ financial goals. They ask clients questions in a relaxed but structured way; help them understand risks and opportunities and build a clear plan for their future. Without a long-term plan their finances are unlikely to head in the right direction. An adviser’s job is to give clients confidence in the future.
- Making the complex simple – while advisers are experienced and well qualified, they never forget whose money they are looking after. The simpler they can make the clients’ plans the more likely they are to stick to them – and that is a key measure of their success. Advisers also help reduce clients’ paperwork – they will help them understand what they need to file, manage application forms and service enquires, provide valuations and updates. Advisers can make sure clients keep the important things and bin the spam!
- Building trust in clients’ financial future – advisers can spot opportunities – understanding clients’ objectives allows them to be alert to opportunities – new products, new tax freedoms, better strategies. They are the clients’ eyes and ears in the ever-changing tax, legal and product markets. And they will keep clients on track – once they have established the risk profile they will manage and review the clients’ investments to make sure they stay on track over the months and years. Advisers assess the clients’ risk profile regularly and the risk of their portfolio to make sure they are in tune.
There are two additional branches where advisers add value, together they make up the Value of Advice Tree (below). Other blogs look at these areas in more detail.
If you are an independent financial adviser and would like more details please email us: firstname.lastname@example.org
Visit the Literature & Insights section of our Adviser Centre to download the ‘Value of Advice Poster‘ a downloadable pdf that can be used with clients as a sales aid or poster (to be issued / approved by the IFA firm).