DEFINING THE FINANCIAL ADVISERS WHO MATTER: AND WHAT THEY WANT

Key concerns:• Getting to minimum

necessary qualifications• Searching for an ‘earn out’

or some kind of security around future income

• Does not believe his clients will pay fees

• Proud of the size of his client book

• Has little idea of which aspects of his business are profitable and finds it faintly unethical to find out

• Is seeking to outsource from weakness

THE RABBIT IN THE REGULATORY HEADLIGHTS

What wealth managers say: “We have to grab the outsourcing opportunity by the end of 2012 – time is running out”

What these advisers say:“I need a partner before time runs out”

The New Model Adviser• WHY DO THESE

ADVISERS CHOOSE TO OURSOURCE?

• Gary Lucas, Burlington Associates: “Our clients…don’t value the asset allocation or the choice of investments. What they value the most is someone sitting there and giving them instruction on [how best to meet their objectives].”

THE NEW MODEL ADVISER

RECURRING REVENUE IS GROWING

65%

31%

4%

TWO THIRDS ARE ALREADY QUALIFIED

NEARLY A FURTHER THIRD WILL BE READY

A SMALL PROPORTION ARE NOT READY

WILL YOU BE QUALIFIED ANDRDR-READY BY 2013?

THEY WILL BE INDEPENDENT

91%NMAS

54%WEALTH

MANAGERS

INDEPENDENT

9%NMAS

46%WEALTH

MANAGERS

RESTRICTED

RDR: WINNERS OR LOSERS?HOW DO YOU ANTICIPATE YOUR ASSETS WILL CHANGE?

33%

40% 21%

6%

GROW A LOT

GROW A LITTLE STAY THE SAME

FALL

WHAT PROPORTION OF ASSETS IS OUTSOURCED?

23%

36% 11%7%

11%

8%

4%

FUNDS

DISCRETIONARY MANAGERS

MULTI-MANAGER FUNDS

69%

17%

14%

66.8% 25.4% 7.6%

Will not change

Will grow

Will fall

How will your use of discretionary managers change over 2013?

We asked 50 New Model Advisers….on average they give their favourite outsourcing partner 70 accounts

With an average portfolio size of £374,485

WHAT DO THEY WANT?

Peter MatthewJacksons Financial ServicesKey facts: -Penzance-based-296 clients-£200,000 average portfolio-£150,000 minimum

Outsourced because?

‘At that time we had three years of awful markets and we saw them bounce back up. Those weren’t comfortable years when we were reviewing clients regularly. So when we were out of the worst, we thought: how do we make sure that doesn’t happen again? It was a dawning realisation that we should outsource’

‘The biggest factor that set 7IM apart was the charging structure, which is a flat percentage with no initial or dealing fees. Everyone else I saw at the time had a classic stockbroker model with 1% plus dealing. That didn’t sit well as it was an open cheque book.’

Mark PearsonOrigenKey facts: -1,710 clients using service-£177,721 average portfolio-£10,000 minimum

Outsourced because?

‘When you look at the information available to the fund managers or analysts in the major houses, even in boutique houses, we were getting second-hand information.’

The other firms we had spoken to were basically saying: "We’ve got a proposition and here you are; pick which one you want. Brooks, however, was prepared to mould its offering towards Origen’s objectives,

So what do they want in an outsourcing partner?

WHAT’S THE BEST THING ABOUT THEIR OUTSOURCING PARTNER?

RARELY MENTIONED ASPRIMARY REASON

MOST FREQUENTLYMENTIONED ISSUE

• Strong risk controls• Personal contact • A local presence • Accessibility on platforms – which reflects an

understanding of the business challenges the adviser faces

THEY WANT THE THINGS THAT BUILD TRUST

WHAT DON’T THEY WANT?

The single most mentioned complaint about discretionary managers by financial advisers is probably the easiest problem to fix….a rubbish website.

‘It is not something I would direct the clients to and say; ‘This is going to Knock your socks off.’

Alistair Mann, Clocktower Fund Management

New Model Advisers took a big risk with their livelihoods

Technology was how they made it work.

Source: New Model Adviser® magazine registration card data, March 2012

PLATFORMS ARE CRUCIAL THEN..BUT WHICH ONES

Citywire Wealth Manager New Model Adviser

ONE BIG QUESTION?

ARE YOU LESS LIKELY TO INVEST WITH A WEALTH MANAGER WHO HAS AN IN-HOUSE FINANCIAL PLANNING TEAM?

I am less likely: 38%I am not less likely: 62%

ARE YOU LESS LIKELY TO INVEST?