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Clients Aren’t Interested In Their Investments

Investments Are Boring

One of the truths about clients that only advisers seem to know is that, by and large, most clients don’t really care about their investments.

Ok, that’s a rather broad statement. To be more precise they aren’t interested in the detail. What they DO care about is how the performance of their investments affects their life plans and goals.

There are a few reasons for this, I’d suggest:

  1. They find the subject uninteresting

  2. They find how close they are to achieving their goals and objectives more interesting

  3. They trust their adviser

DIY Metaphor

I am DIY dyslexic. Give me a hammer and I’m less likely to hammer all morning than to stare at it for five minutes before putting it down and wandering off to play my guitar. Consequently we have a friend who sorts out stuff in our house (I do pay him, so maybe ‘friend’ is too strong a word). Simple plumbing, insulating the loft, tricky shelving (also known as ‘shelving’ as far as I’m concerned), that sort of thing.

Mark loves to tell me what amazingly clever things he’s just done. Why the boiler wasn’t working, the importance of rawlplugs, which way to turn the handle on the gas cannister (it’s the opposite to righty tighty, in case you were wondering). Each time I have to politely stop him and point out, in the nicest way possible, that I don’t really care. As long as my books now have a place to live, that’s all I’m worried about.

DIY Investors

There has been a lot of talk recently about how competition for advisers is not from other advisers, but from ‘not getting advice’.

Holly Mackay is setting up a new venture to provide information for people who want to manage their own investments. In order that she might better understand what role advisers might have, she came to Ovation and spent a day with us, sitting in on two client meetings. This is her article about the experience.

Journalists, commentators and regulators may be surprised to learn that investment performance did not feature in either meeting – Holly certainly was. In both cases the clients left our offices understanding themselves and their future a little better.

Investments Are Boring, But Important

Now, don’t get me wrong, I’m not suggesting that adviser firms shouldn’t worry about investment management. I think we are best placed to manage clients’ investments as we truly understand the client’s objectives (in fact an early Adviser Lounge article was on this very point).

Indeed, it is the very fact that clients trust their adviser to manage their investments that allow client discussions to focus on objectives and goals, on what motivates them. On asking the questions that do help clients understand themselves better.

A phrase often heard in our meeting room is “I don’t need to look at the details of the performance, I trust you guys to do your job”.

And Your Point Is?

The public have undoubtedly benefited from the recent focus on the outrageous costs of the fund management industry, and work by Mark Polson in putting the spotlight on platform charges – power to your collective elbows.

But there are at least three aspects to financial planning – investment management is only one of them (along with tax planning and financial planning), and it is not the one clients tend to value most.

Let’s make sure the message to the public is a balanced one – advisers add value that can’t always be put into numbers.

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