The quality and depth of financial advice will always be the primary driver when looking for a new financial adviser. However, the skills and experience required to advise people on their finances are continually developing, reacting to investment trends and client demands. Consequently, the role of a modern-day financial adviser now involves a degree of emotional support.
A recent survey by Morningstar cast a fascinating light on this topic, looking at the main reasons why people seek the guidance of an independent financial adviser.
The primary drivers for choosing a financial adviser
Here at Cedar House Financial Services, we fully appreciate the role of a modern-day financial adviser, listening to the needs of our clients and prospective clients. Ultimately, people want to work with someone they can trust, able to provide quality financial advice while also appreciating the value of emotional support.
Some of the main issues considered when appointing a financial adviser include:
Discomfort with handling financial issues
The survey found that 32% of those who responded appointed a financial adviser due to discomfort handling financial issues. This resonates with historical surveys which found that many people in the UK were embarrassed or felt inferior discussing their finances with family, friends and even a financial adviser. When you consider the importance of short, medium and long-term financial planning, the degree of discomfort many feel is surprising.
Specific financial needs
It is no surprise to learn that specific financial requirements was the joint top reason for appointing a financial adviser (32%). While it is vital to have specialists in areas which impact your personal and business life, there needs to be a degree of structure. For example, if you have four advisers specialising in different areas, they must be able to work together and share information.
To put this into perspective, the advisers at Cedar House Financial Services specialise in a wide range of topics such as:-
- Retirement planning
- Wealth management
- Mortgages
- Employee benefits
- Protection
- Auto-enrolment
Only by having a broader picture of your overall finances will each party, and their cumulative input, be able to address your issues properly. Consequently, you may have a primary financial adviser specialising in a particular area while also having contacts across a broader range of subject matter. They would act as the first point of contact and communicate with other parties when required.
Personal coaching
Interestingly, 17% of those who responded to the survey cited personal coaching as a reason for appointing a new financial adviser. This is an area in which we have been strong for some time, the need to provide high-quality advice and act as a sounding board when required.
It is essential to retain your composure, especially in challenging times, and maintain an ability to see the short, medium and long-term picture. There is also a need to be flexible, forward-thinking and take a proactive rather than reactive approach where possible. Markets and finances move so quickly today that it is crucial to have an adviser you can depend upon, open up to and trust the advice and guidance they provide.
Recommendations from family and friends
The Internet has opened up an array of different opportunities to track company feedback from past clients as well as other issues in the public domain. Occasionally, the amount of information available can be overwhelming and challenging to decipher. So, even in this modern digital world, simple recommendations from friends and family still go a long way, with 12% of the survey citing this as an essential means of finding a suitable financial adviser.
Addressing your client’s emotional needs
The Morningstar survey provided an exciting look at how clients select financial advisers and their advisory and emotional needs. Advisers must be able to connect with their clients and prospective clients, creating a rapport which allows the free flow of information so that we can provide bespoke advice.
Some of the more common ways to achieve this include:-
- Refrain from using technical sector language
- Provide access to case studies where possible
- Clarify and discuss common financial concerns
- Avoid the term “staying in control of emotions.”
While this all makes perfect sense, the advice to refrain from using the term “staying in control of emotions” is interesting. Feedback suggests that some clients feel this is focusing on a specific potential emotional weakness that may make them uncomfortable. All parties must feel comfortable discussing any issues related to finance and often in a wider context.
Summary
While much of the feedback from the Morningstar survey seems like common sense, the focus on emotional support in the modern day is perhaps the most surprising. As experienced financial advisers, we are well aware of these issues, and it is helpful that clients are now more willing to discuss these in the open. In order to nurture a long-term relationship, there needs to be rapport, trust and the ability to talk openly about finance and any related subject matters.