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20 things that advisers do to add value

There is little doubt that financial advisers add real value to clients – clear goals, peace of mind, financial security and confidence in the future.

With the growing transparency of fees (platforms, portfolios and advice) the need to show this value is growing. The FCA has expressed more than a passing interest, and a recent Which? Survey suggesting the average ongoing advice fee was 1.3% per year and £3,000 up front for pension advice.

But the price of advice is not the same as the value. As one of Oscar Wilde’s characters famously noted, “A cynic knows the price of everything and the value of nothing”. We can counter with another quote from the Oil Well Firefighter Red Adair, “if you think dealing with a professional is expensive, wait until you deal with an amateur”.

Perhaps we need to get better at showing our value to customers. Here’s more than 20 things that advisers do to add value for advisers to share with clients.

1. We help you determine the rate at which you need to save at to meet your long-term needs.
Value: confidence in the future

2. We assess how much risk you should take and need to take to achieve your goals.
Value: peace of mind

3. We help couples determine how they combine their objectives together into a single plan in a cost effective and tax efficient way. And ensure that everyone is involved in the decision making.
Value: peace of mind

4. We help you determine how much money you’ll need to retire and when you can retire.
Value: peace of mind

5. We look at old final salary or "frozen" pensions from previous employments. Transfer values are at all-time highs (bond yields at all-time lows).
Value: you may be able to retire earlier, take more tax-free cash, increase life cover / flexibility, plan for IHT

6. After you retire, we help you figure out how much you can / should take out for living expenses, and keep updating the numbers as your circumstances evolve.
Value: potentially prevent you from running out of money

7. We help you determine what kinds of insurance you need, how much, and the best way to buy cover at low cost.
Value: peace of mind and potential savings

8. We make sure life insurance is written in the right trust.
Value: benefits are paid quickly to the right people in as tax effective manner as possible – potentially saving tens of thousands of pounds in tax

9. We help you put the right asset classes in the right amounts in your portfolio.
Value: reducing risk and potentially boosting your returns

10. We determine the most efficient way to divide your investments between tax-exempt, tax-deferred and taxable accounts (ISAs, bonds and GIAs)
Value: boost your after-tax returns

11. We regularly rebalance your assets.
Value: to help control risk and potentially add to your returns

12. We select the new generation of low-cost index funds to reduce your expenses.
Value: could add 0.5% or more per year to your returns

13. We help you choose the right ISA for next year. And making sure you put the most tax efficient assets in your ISA.
Value: every little extra return helps

14. We help you select funds and contributions into your employer’s retirement plan.
Value: potentially tens of thousands of pounds

15. We harvest tax losses and gains when appropriate. Use your CGT allowance, offset gains and losses.
Value: potentially tens of thousands of pounds

16. We help you with estate planning and long-term care provision. Make a will. Sort out powers of attorney.
Value: potentially tens or even hundreds of thousands of pounds in the form of additional benefits to your heirs

17. We prevent you from making emotional investment mistakes during inevitable market volatility, both on the upside and the downside.
Value: potentially tens of thousands of pounds

18. We help you make decisions about charitable giving.
Value: potentially boosting what the charity receives from your gift

19. We help you make decisions about giving money to your children, grandchildren or others.
Value: potentially priceless

20. We help you with setting aside money for education for children, grandchildren or others.
Value: a long-term gift that can last for decades

And a bonus

21. We help your children get a smart start as investors.
Value: assuming they learn well and follow through, this is priceless

 

David Norman, Joint Founder and CEO, TCF Investment

David (DAN) Norman has held senior sales and marketing roles with life companies, banks and asset managers and was CEO of Credit Suisse Asset Management (UK) before jointly founding TCF Investment a decade ago.

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