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The Clients View….. Statistics to make you sit up and think.

Last week I attended a fantastic seminar in London hosted by Compeer Limited, who provides business critical management information specifically for wealth managers, private client stockbrokers, and private banks.

The seminar was titled “Regulatory and Investment Change: The Clients View”. I was keen to attend this event as Compeer were announcing the results of a major research exercise they had undertaken with 1,007 end investors, split between high net worth (£1m+), affluent, and mass affluent (£50k – £250k) to gauge the view of the client, 10 months after the introduction of the Retail Distribution Review (RDR).

I won’t bore you with all the facts and figures, but there were a few which really stood out to me and resonated with points I have made in my previous blog posts.

When asked “Have you heard of the FCA’s RDR” only 26% of Advisory Investors and 24% of Discretionary Investors said yes. That means that only 3 out of 4 investors have not heard of RDR! As you’re reading this, can you honestly say you have educated your clients and informed them of the changes which have taken place?

That nicely leads me on to the next interesting statistic. “Have you been approached by your wealth manager / adviser to discuss your portfolio post January 1st 2013?” More than half of investors using discretionary or advisory services have yet to be approached by their adviser since the start of 2013, 54% Advisory and 55% Discretionary. I suppose this backs up the reason why clients haven’t heard of RDR, many haven’t even seen their adviser.

Client contact and ongoing servicing is key to ensuring practices continue to thrive and grow in this new RDR world, if not you may find your clients going elsewhere or even choosing to invest without advice. Compeer showed loyalty is reducing, with 27% more ready to change adviser since the credit crunch and 1 in 2 likely to go it alone. As an industry we need to demonstrate why clients need financial advisers, why they are worth the fees they charge, and why the benefits of using an adviser outweigh execution only services. This report also demonstrated that most investors believe the true level of fees are not hidden and their wealth manager/adviser is not mis-selling products, trust is still out there and we need to build on that.

For my business and a technology point of view, it only strengthened my beliefs in my proposition especially when looking at the figures relating to the continuing low yields. When asked “What would persuade you to invest cash currently held on deposit in other investment products or asset classes” 57% would be persuaded by a guarantee that their capital was protected and 58% by a guaranteed return on capital! Proof that if advisers gave their clients more peace of mind, monitoring client investments closer and subsequently helped them to achieve greater returns on their capital, they will invest more.

The topic of clearer information was also highlighted. As a whole 90% of investors were satisfied with the clarity and comprehensiveness of the reports they receive, only 70% of that figure understood most or some of the report. Clients don’t want baffling with too much information, keep it clear, concise and relative to what they are trying to achieve.

When I walked out of the seminar having listened to all the speakers and the debates of the panels I could see that it is all so very simple. 1. Educate your clients; don’t be scared to tell them about regulation and fees. 2. Look after your clients; give them peace of mind and more reasons to trust you. 3. Inform your clients; keep them updated with clear information at times that are relevant and important to help them make the most of their investments in good and bad times.

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