I joined a panel of speakers at the Morningstar Investment Conference in London on Tuesday afternoon.
It was very well attended event with a mix of professional advisers and investors who use the wide range of Morningstar services.
Our panel moderator was Holly Cook, Editor at www.Morningstar.co.uk, and she presented some interesting statistics from a survey of Morningstar users.
What is most important when choosing an adviser?
Over 50% of those surveyed said that the most important attribute that they would look for in an adviser was “trust”.
I fully understand this because the relationship between adviser and client is very much one of trust.
Clients have to tell their advisers many things about their personal views of the world, their goals and objectives and indeed their dreams. This is very difficult to do with someone that you do not trust.
So how is that trust arrived at? Probably based on reputation (which also scored highly in the survey – about 38% of respondents) but most importantly based on open and consistent communication on a regular basis.
Definitely based on the integrity of the adviser and establishing that the adviser has a genuine concern for the client.
And of course that they can demonstrate what it is that they do from results (and as you will see later I do not mean just investment results)
Reputation was also vitally important to the consumer choosing to use an adviser. No surprise there really because it would be difficult to see why anyone would choose an adviser with a poor reputation.
Cost came third on the list with just under 30% of consumers offering this up as their most important reason for choosing an adviser.
Hopefully value rather than price is the real determining factor although the panel recognised that determining the value of subjective issues such as “peace of mind” and “more time to focus on other things” was quite a difficult thing to do.
What was fascinating and challenging was the fact that when asked “What do clients expect to get from paying for your advice?” 46% of respondents wanted “better investment returns.”
My comments in the panel session were along the lines of what does that even mean?
Better than what? Better than they are already achieving? Better than everyone else?
I suggested that what an adviser could provide might be best described as “more suitable” investment returns.
Suitable in the sense that they were closely linked to pre-determined financial planning goals.
Suitable because they sought to avoid some of the great levels of volatility that we often see in DIY investment portfolios.
Suitable because they might help to avoid some of the real mistakes that we see in opaque funds.
So in that respect suitable might be seen as better.
The Morningstar Investment Conference was a brilliant event with a wide range of speakers and subjects but, as it should always be, the focus was on the needs and wants of the consumer because if we cannot satisfy them then we don’t deserve to have them as our clients.
