More than ever IFAs are having to justify their value. Amidst MiFID disclosure requirements and ever-growing press scrutiny, advisers need to show what they do and why they’re worth it. In the long run, the IFA’s focus will be getting the right outcome for the client - there are many ways they can show how they are adding value through their client’s financial journey.
With a long-term plan, it’s the IFA’s job to guide clients to solutions that aim to fulfil their objectives and give them confidence in their future. By assessing the client’s risk profiles and financial goals, IFAs can help them navigate risk and identify opportunities in order to build a clear plan that will meet their future needs.
Keeping the client’s investments on track is a key foundation of providing good outcomes. Once IFAs have established clients’ risk profiles, they align the risk of portfolios to make sure they are in tune and stay on track over the months and years.
Cash flow modelling can be a powerful but simple tool to illustrate clients’ projected returns, costs, inflation and their income needs in the future. Seeing a picture of future “money in and out” can really put into perspective how the client’s plans are progressing and what changes are needed.
IFAs can help clients to avoid common mistakes, guiding them through times of fluctuating markets and help them to make the right decisions for sticking to the plan. Perhaps selecting a cost-effective, efficient and reliable platform will add value and make portfolio management and tax planning easier - meeting the client’s needs and making their financial lives simpler.
Tax can really erode savings and investments so checking that all applicable tax reliefs and allowances are used each year can really boost savings and investments, resulting in the client’s money growing faster. There are many “tax traps” and complex allowances that advisers understand and can help clients navigate.
Risk modelling/profiling tools can be used to try to maximise the client’s returns for a given level of risk/risk tolerance, reducing portfolio risk for a required return or maximising return for a given risk.
Managing the client’s retirement income, for example by coaching clients through the options like Pensions Freedoms and avoiding sequence of return risk, could add many years of income from their portfolios.
Having understood the client’s objectives IFAs can be alert to opportunities, acting as the client’s eyes and ears in ever-changing tax, legal and product markets - new products, new tax freedoms, better strategies.
Today’s portfolios are very different to those of ten years ago and ten years before that – IFAs keep up to date with developments and lower cost solutions therefore keeping their clients’ portfolios up to date. Reducing costs and boosting efficiency can eventually translate into big differences over the years.
IFAs scour the market to find good value. Life assurance, pension products, wrap platforms and investment products have all seen price pressure in the last few years. Advisers can potentially save costs which, when combined with good tax planning, can really boost clients’ returns.
As well as getting the best value for clients, an IFA can increase the amount of client portfolios protected under the Financial Services Compensation Scheme (FSCS). They can also provide rigorous due diligence on all investments - giving clients peace of mind.
At the end of the day maybe one of the most valuable aspects to an IFA is that they can be there when the client needs them most. During stressful times like divorce, death, business transition or investment market volatility, IFAs can provide the confidence they need that their wishes are met, their loved ones protected, and/or their business secured and even that the paperwork is under control!
Fast start 2020 - TCF Investment roadshows
Supporting TCF Investment on their roadshows, the Embark Group will discuss pension allowances and the importance of planning.
View more details and book your place today.
David Norman, Joint Founder and CEO, TCF Investment
Before jointly founding TCF Investment a decade ago, David (DAN) Norman held senior roles with life companies, banks and asset managers and was latterly CEO of Credit Suisse Asset Management (UK).
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