The alternative to this question is ‘Do Independent Financial Advisers add any ongoing value over and above picking a fund in which to invest?’. The simple answer is yes, we do.
- Holding the right assets in the right wrapper and using legitimate tax allowances is probably worth about 0.5% per annum.
- Reducing the total cost of ownership of assets for new clients, often by more than 1.5% per annum.
- Independent Financial Advisers are the only ones who understand a client’s whole position, and usually liaise with accountants and solicitors, as well as family members
- Independent Financial Advisers help clients resist the temptation to jump on each new fad or fashion promoted in the weekend press.
- Independent Financial Advisers help clients stay invested when ‘investment experts’ are screaming that it’s the end of the world.
What is the value of the relationship?
We, and our clients, think anything between ‘a lot’ and ‘priceless’. Is there value in doing nothing? Sometimes, yes. Or more likely: ‘Don’t change the portfolio, but use this allowance or your budget more carefully in this area’.
Product providers, wrongly, see this as nothing because it does not involve selling a product. But it is akin to a doctor working with patients to improve their blood pressure by helping them to lose weight and stop smoking, rather than just putting them on medication. Do we regard that as doing nothing?
How often do plans need reviewing? At least annually as they do need careful ongoing monitoring, which takes expertise and focus.