An ideal adviser
I have met many financial advisers in my career; starting when I was a broker consultant back in the 70’s (when advisers were product salesmen) and continuing for the past 15 years or so as a “Big Four” consultant; working for providers and advisers in the long-term savings, investment and protection sectors.
I’ve also moderated dozens of adviser workshops at Meeting of the Minds and other events and worked on adviser M&A projects. Every individual firm or adviser seemed to be different. And I still haven’t identified exactly what creates the ideal adviser. Perhaps now is the time to try. So, from the perspective of this relatively affluent baby boomer, in no particular order, here we go.
Communication: The ability to turn complex technical analysis into simple steps is critical. As is the ability to make boring details interesting; in documents as well as face to face.
Experience: It would be really helpful and reassuring when it is clear that my ideal adviser has actually dealt with similar client situations before and/or has been in similar situations themselves. “I know how you feel” – when authentic, is a very comforting statement.
Caring: From my perspective, it’s important that the adviser actually cares deeply about ensuring that he or she gives me the best advice, and that I understand why it is the best possible advice. A degree of self-doubt is welcome.
Relationship. I don’t work with people I don’t like. I look for professional and enjoyable relationships based on mutual respect and trust. And it’s important that my better half buys in to the relationship with my ideal adviser as probability suggests that it will be her relationship not mine at some time in the future.
Reliability: Sounds like a no-brainer but I encounter many people that don’t actually deliver what they promise. They might be too busy, one of their staff might let them down or they just might not think it matters that they deliver on time. I think the ideal adviser under-promises and over-delivers.
Emotional intelligence: It is a critical quality. And most successful advisers have it in abundance. Talking about serious money, redundancy, retirement, marriage, children, divorce, bereavement and other critical life events is highly emotional. An adviser that can understand how the client is feeling at times like this is invaluable. And this understanding is very unlikely to be replaced by an algorithm any time soon!
Challenge: Investment carries risk. And many people (including me) are wary of risk. My ideal adviser is able to challenge this attitude in a positive way in order to arrive at the best solution rather than the easiest solution. Emotional intelligence at work!
Technical competence: My ideal adviser does not have to be an absolute expert in everything; provided of course there are absolute experts in the back office. As mentioned above; it is the ability to clearly communicate what is necessary that is essential. I once heard a CEO say to the head of the actuarial function; “I just don’t get it” The actuary replied; “Don’t worry; it’s very complicated” To which the CEO responded. “I’m not worried that I can’t understand it; I’m worried that you can’t explain it”
Investment expertise: I have limited confidence in investment “experts”. However, I do have confidence in process. And if there is a process that makes sense to me I really don’t mind if it is followed by the adviser or a third party; provided it is followed’
Technology: My ideal adviser would have a strong technology tool set help deliver their proposition. And I would want something online to help me see how my investments are performing against the agreed benchmarks. The ability to input and see my physical assets and cash deposits would also be helpful.
The first deliverable: Initial advice. Less is more. And I know very well how much longer it takes to create a short document rather than a long one. We once had a very senior client who demanded a SOAP – a statement on a page (A4. Arial 12). If you sent him anything longer it was sent back. These SOAPs took hours to write but saved him hours of reading. And if he needed more to make his decision he would let you know very quickly.
Clearly, there are regulatory requirements that have to be met in the world of financial advice. But my ideal adviser would be able to encapsulate the important stuff in a short document. “This is where you are, this is where you want to be, this (if anything) is what needs to be done to get you there. These are the key risks. Read the attached full report as soon as possible and get back to me with any questions.”
The second deliverable: Implementation. This has to be as easy and efficient as is possible. I appreciate that product providers are not always helpful in this area.
The third deliverable: Administration and on-going service. The former will be dealt with by my ideal adviser’s support staff. As far as the latter is concerned the adviser will be pro-active in terms of “Bed and iSA “etc. will let me know what is going on it terms of tax and other developments and meet me twice a year for a chat about my life and my investments. Followed by a decent lunch.
Fees: My ideal adviser would charge fixed fees and/or hourly rates rather than a percentage of the investment. This is not a point of principle but pure maths based on the sums involved. However, if a DFM was managing the portfolio against the mandate agreed then I guess bps is the only option. In any event; my ideal adviser will demonstrate value for money at each and every opportunity. And they won’t find me quibbling about cost. In fact, they might find me picking up the bill for lunch!