This morning I spoke to an audience of over 50 IFAs on the subject of the IFA proposition; essentially what an IFA does for his or her clients.
With so much regulatory change taking place in the world of retail financial services at the end of this year, we feel it is important not to lose sight of this client focus.
Apart from some basic hygiene factors, every IFA is different in terms of the way they provide services to their clients. Some continue to provide a very basic service which could be best described as product selection from the whole of the market.
Others go beyond this product broking role to deliver a more holistic service to clients.
Here at Informed Choice we believe that our clients want three main things from us.
They want advice; this must be impartial and in the best interests of our clients.
It means we take the regulated status as an independent financial adviser further than the minimum requirement. In addition to recommending products from the whole of the market, our pricing structure means we can deliver advice independently from product solutions, without the commercial motivation to recommend a financial product merely to be paid.
Our clients also want to implement our recommendations.
Whilst our implementation service is not a prerequisite for those that seek our advice, we do find that the majority of our clients want a ‘one stop shop’; once they have received our advice they typically want us to implement any action points on their behalf.
We also find that our clients want an ongoing review service.
On the basis that the worst investment is usually one that is made and never reviewed, this is arguably the most important part of what we offer to all of our clients. Every client receives a comprehensive review report at least once a year and has the opportunity to meet with their Financial Planner to discuss any changes that might be required.
These three component parts of our service (advice, implementation and review) are of course integrated with a wealth management service, which is based on our investment philosophy and investment advice process. This ensures that our clients consistently receive suitable investment advice which is tailored to their goals, objectives and risk profile.
Increasingly we find our clients want an enhanced form of financial advice which is based on the Financial Planning principles of cashflow forecasting. This helps a growing number of our clients answer important questions, including whether they will run out of money during their lifetime.
From the end of this year, all financial advisers are required to be qualified to a higher standard and work on a more transparent charging basis.
What will continue to differ is the type of services different IFAs choose to offer to their clients and this will quickly become a distinguishing factor all investors will need to carefully consider.
