Hard to find right advice fit
Jonathan Beale said the introduction of the Financial Markets Conduct Act, which deals with the governance and robustness of products, alongside the Financial Advisers Act, made it clearer that advisers needed to focus on coaching and planning for their clients, not dealing in the technical details of the products they were placing them in.
“There's advice and product. The new legislation is taking care of that separation. A lot of times advice has been ‘this is a great product, this is what it does’. But the important thing is the advice, how well they get to know clients and understand their situations," Beale said.
Beale said research showed that strong financial coaching from advisers could add about 150bps of returns to client portfolios every year. Asset allocation decisions would make up another 3 per cent. “The coaching element, how well you understand the client, and what they are trying to achieve, and talking them down from decisions makes a big difference to the long-term outcomes.”
He said that had been proved over recent weeks when the surprise Brexit result put the markets into turmoil.
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