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How to stop clients from walking away

Building a wealth advice business can be a rewarding career but how do you maximise the value of your business, particularly if you have an eye on selling it to a third party at some point?

One of the key criteria for valuing adviser firms is the assets under advice (AUA) that they have on their books. The wealthiest clients obviously have a big part to play in contributing to this figure so it follows that advisers really need to hang on to them.

Most experienced advisers will have well-tested strategies for keeping clients loyal but a recent paper by Cap Gemini that focuses on the Top Trends in Wealth Management 2020 reveals something that some advisers could benefit from doing better – providing personalised investment services.

The report shows that end clients value a personalised wealth management service and a lot don’t feel like they are getting one – just two in five of those surveyed said that they were satisfied with the level of personalisation that they received.

So how do we define personalised advice? In my mind there are two distinct ways:

  • Personalised service: not robo advice
  • Personalised portfolio: not standard model portfolios

Robo advice is about as far away from personalised service as it’s possible to get and most advisers with HNW clients do not regard this as a serious threat.

Offering a personalised investment service is what many advisers regard as their key strength, even though empirical evidence has shown this can be very inefficient for advisers to do. It involves a high level of qualifications and, importantly, time. It can also carry a relatively high level of risk.

An efficient way for advisers to offer a personalised portfolio service has traditionally been to introduce their clients to a third-party discretionary fund manager (DFM).  However, this doesn’t work for a lot of advisers because it’s expensive, excludes some clients because of high minimums and introduces ‘three’s a crowd’ relationship issues.

Mass customisation

Technology can provide an answer to this issue though. Mass-customisation (something PortfolioMetrix launched 10 years ago and which is now being emulated - albeit not in the exactly the same way - by others) solves these issues.

It works by allowing advisers to customise model portfolios to exactly match their clients’ needs and, because our proprietary technology is used to power it, it’s highly scalable across multiple clients.

Mass Customisation can deliver the personalised wealth management service that clients desire:

  • Personalised service - no relationship issues as the only interface clients have is with their adviser
  • Personalised portfolio with:
    • No minimum investment size
    • No expensive fees
    • Investment options that align with their individual needs

Adopting this type of investment proposition provides advisers with the best of both worlds: the ability to offer clients the personalised service they crave and the benefit of running an efficient, cost effective business.

Reducing risk

Another benefit of taking a Mass Customisation route is it helps meet the requirements of the Product Intervention and Product Governance Sourcebook (PROD), which came in as part of MiFID II.

Advisers are already expected to be complying with PROD but we know from a research exercise we carried out with advisers and experts in 2019, many find the process daunting as they perceive it to be complex.

However, experts are warning that the regulator is likely to clamp down hard on any adviser who isn’t complying.

The PROD regulation is designed to encourage advisers to segment clients so the investment service they are offered can better fit their needs. Clearly, having a system that allows for customised portfolios to be constructed and then run efficiently using technology, without eating into an adviser’s time, would seem to be the answer.

With both clients and the regulator demanding the personalisation of investment portfolios, there has never been a better time for advisers to review their operations and look at how they can work smarter, not harder.


Ben Peele, Managing Director of PortfolioMetrix UK

Ben Peele joined PortfolioMetrix in April 2019. He has over 20 years of experience in the financial services industry. Prior to joining PortfolioMetrix Ben ran equity sales teams at UBS Investment Bank and held senior positions in the fintech industry.

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