Clients place most value on meeting goals: IOOF

Advisers can charge their clients higher fees if they show them their service is helping achieve their individual investment goals, a financial services firm says.

Wednesday, March 11th 2015, 6:00AM

by Susan Edmunds

Renato Mota, general manager distribution of Australia-based IOOF, said advisers had traditionally tried to differentiate themselves with their ability to generate investment returns or their technical skill.

But he said consumers saw the most value in advisers who could help them meet their goals.

It follows a white paper IOOF put out last year, about the expectation of advice.

It found 82% of advisers felt their fees were under pressure or would be under pressure within the next three years.

IOOF had seen advisers focus on increasing the number of client contact points, enhancing client access to business websites, offering additional products or services or spending more time on investment management. But Mota said that did not necessarily translate into a perception of greater value.

Clients who felt they were on track to meet their investment goals were more than twice as likely as others to say they were getting value for money and six times less likely to think about seeking alternative advice.

More than three-quarters said achieving their core goals was the thing that defined a successful financial planning experience. Just 14% said it was better than average investment performance that made the difference.

But almost half of advisers did not know whether their clients were on track to achieve their goals.

Mota said IOOF believed the premium advice offer in future would be a value-driven model that was dependent on a coaching relationship linked to a desired outcome.

It would include specialisation within specific market segments, coaching towards a desired objective, ongoing evaluation of progress against that and clear planning philosophies.

Mota said: “There’s no real silver bullet. It comes back to the business’ ability to define the value proposition.”

There was a temptation to be all things to all people but that tended to undermine an adviser’s value proposition, he said. “We spend so much time on the technical aspects of what is required to give advice that we take for granted that at the end of the process there’s a client with life objectives and that’s what matters.”

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