Peace of mind has been cited by well-off investors as the key reason they seek advice from a financial adviser, according to a new study.
Over half (54%) of the investors surveyed said that seeing a financial adviser helped to reassure them they were doing the right thing.
The study, of 1000 investors with over £300,000 in investable assets, was carried out by DFM Hymans Robertson Investment Services (HRIS).
Just over a third (35%) of investors said they used an adviser for their financial expertise and 17% because they do not have time to look after their finances.
Hymans says the prioritisation of peace of mind was in line with the Consumer Duty’s emphasis on “soft factors.” It says that the FCA’s new Consumer Duty brings into “sharp focus” the need for advisers to not only focus on how they deliver value for money but also how they demonstrate it.
The ‘Hymans Robertson Investment Services: Consumer Research 2023’ aims to help advisers understand the attitudes of investors with investable assets of over £300k.
When asked about which aspects of advice investors placed most value on, two thirds (66%) said that investment returns were critical and just over two-fifths (44%) attributed value to having their tax managed efficiently.
However soft factors were seen as “equally, if not more important” including the ability to plan to achieve financial goals with about half (50%) saying this was a major benefit of using an adviser.
Despite market volatility, the report found that only 4% of respondents were looking to disinvest entirely.
The report highlighted that communications from advisers play an important role in providing value for investors. It found that nearly two-fifths (37%) said they would like a summary of key points added to the communications they receive. Just under a third (32%) wanted information with forward-looking views and opinions and a quarter (25%) wanted less jargon.
William Marshall, chief investment officer at Hymans Robertson Investment Services (HRIS), said: “It’s hard to think of a more challenging backdrop than the one we’ve experienced in recent times.
“Our research showed many individuals are now relying on their adviser because of the additional value they get from the personalised service they receive. This combined with the provision of information and technical expertise offers a mix that gives peace of mind – an almost unquantifiable value added.
“As regulations like Consumer Duty focus more on getting firms to show how they provide value for money, developing a clear understanding of the parts of their service that clients value, will be very important for advisers. Firms will be in a strong position if they’re able to show how different parts of their service, such as their provision of regular updates, or information which is easy to understand and has clear key facts with added insight, gives clients the clarity and peace of mind they appreciate.”
• Hymans Robertson surveyed 1,000 UK investors with investable assets of more than £300,000 in early 2023.
The report can be found here: Hymans Robertson Investment Services: Consumer research 2023.
