Advisers need to work on better communicating the intangible benefits brought about by advice if they want potential clients to value their service, according to Russell Investments Solutions.
While 79% of the public acknowledged advisers had financial expertise according to the Australian Securities and Investments Commission (ASIC) and could add value to a portfolio, advisers were missing out by failing to communicate some of the ‘soft’ benefits they could bring to clients.
These included effective communication, client understanding, emotional intelligence, behavioural awareness, financial education and time efficiencies.
This was especially important as advice moved from an asset-based fee to one that was focused on value.
Bronwyn Yates, director at Russell Investments, said: “There is some recognition that there are intangible benefits to getting advice but it is difficult to quantify that and advisers find they lack confidence in the right way to tell that to the client.
“There are many reasons beyond cost that people use a certain provider, be it a financial adviser or a certain coffee shop. That varies between different people and advisers need to be able to tap into that and find a more nuanced way to tap into what motivates a client.”
Examples of intangible benefits to explain to a client might be the convenience of the service, the confidence and education it would bring to a client, the peace of mind from knowing their investments were being looked after or the organisational benefit which gave them extra free time.
Yates suggested advisers used existing client case studies to highlight how expertise had helped them and the outcome the adviser was able to deliver and had a clearly-defined value proposition.