4 June 2019
Adviser Delta is Quilter’s research backed formula to reveal the true value of financial advice. It provides advisers with an equation to reveal the percentage difference they make.
Quilter is today launching Adviser Delta, a formula which aims to quantify the emotional and empirical value that financial advisers deliver for clients, on an annualised basis. The formula is based on robust studies and backed by academics from Cass Business School among others.
In the white paper Quilter outlines the three key elements that make up Adviser Delta. For each element Quilter has identified quantifiable measures, based on robust assumptions, that allow for a numerical value.
The three elements are:
- How is the investment held
The value an adviser adds by placing assets in the right name, with the right beneficiary confirmed, and using the most efficient tax shelter, helps ensure good client outcomes. This means clients do not unnecessarily lose money to HMRC, or unnecessarily impact their welfare benefits and support.
- Enhancing the investment solution
The value the adviser adds through buying power to leverage price or obtain product enhancements; the impact of properly managed portfolios in terms of asset allocation, diversification, rebalancing, monitoring and ongoing suitability.
- Avoiding inherent behavioural tendencies
The value an adviser adds by ensuring their clients do the right things, at the right time, to realise their financial goals. For example, stopping them from overtrading; preventing them from ‘panic selling’ and many more.
As one of the UK’s leading proponents of face-to-face advice, Quilter recognises that pinpointing and articulating the value created by financial advisers can be challenging. While there have been previous attempts to quantify the value of advice, these theories have focused on the impact on investment returns alone. Adviser Delta aims to focus on advice rather than product, to compare the benefits advised customers receive versus non-advised consumers. By focusing on case studies based on specific client profiles, Quilter aims to demonstrate how the Delta formula can be tailored to clients’ individual circumstances.
Andy Thompson, CEO of Quilter’s advice business, comments:
“We know that there is a massive advice gap in the UK and that advice makes a substantial difference in people’s lives. But, we struggle to explain it and so we become our own worst enemies as people don’t trust the industry, are not convinced of its value, and believe they can achieve their financial goals on their own.
“Adviser Delta gives advisers the framework to put a figure on the difference they are providing to their clients. Crucially, this is about more than just the investment performance. It goes back to the basics of what advice offers. It’s about taxation, investment choices and how you help your clients navigate emotions, behavioural biases, and the practicalities that life throws at them.
“When reviewing the merit of professional services, consumers naturally want to understand what are they getting for their money? That’s a question the financial advice industry has struggled to answer because much of what we offer is intangible. This formula dramatically changes that conversation.”
Andrew Clare, professor of asset management at Cass Business School:
“We can speculate about the reasons behind the reticence of British people to seek paid-for financial advice, but perhaps one of the reasons is that the financial services industry has not done a good job demonstrating the benefits that might accrue from taking professional financial advice.
“By thinking carefully about the embedded value in financial advice and by calibrating its value, Quilter's research provides a challenge to those who believe that one cannot put a value on sound financial advice, and also to those who believe that such advice is not worth paying for.”
Report available upon request
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Notes to Editors:
Quilter plc is a leading wealth management business in the UK and internationally, helping to create prosperity for the generations of today and tomorrow.
Quilter plc oversees £95.3 billion in customer investments (as at 31 March 2020).
It has an adviser and customer offering spanning: financial advice; investment platforms; multi-asset investment solutions; and discretionary fund management.
The business is comprised of two segments: Advice and Wealth Management and Wealth Platforms.
Advice and Wealth Management encompasses the financial advice business, Quilter Financial Planning; the discretionary fund management business, Quilter Cheviot; and Quilter Investors, the Multi-asset investment solutions business.
Wealth Platforms includes Old Mutual Wealth UK platform and Quilter International, including AAM Advisory in Singapore.
The Old Mutual Wealth Heritage life assurance business was acquired by ReAssure Group Plc on 2 January 2020.
Since its IPO in June 2018, Quilter plc’s businesses have progressively rebranded to Quilter, as follows:
- Quilter Financial Planning (previously Intrinsic)
- Quilter Private Client Advisers (previously Old Mutual Wealth Private Client Advisers)
- Quilter Financial Advisers (previously Charles Derby Group)
- Quilter Financial Adviser School
- Quilter Cheviot
- Quilter Investors
- Old Mutual Wealth (becoming Quilter Investment Platform in 2020)
- Quilter International (previously Old Mutual International)
This press release is for journalists only and should not be relied upon by financial advisers or customers.
Please remember that past performance is not a guide to future performance. The value of investments and the income from them can go down as well as up and investors may not get back any of the amount originally invested. Exchange rate changes may cause the value of overseas investments to rise or fall.
This communication is issued by Quilter plc. Registered office: Millennium Bridge House, 2 Lambeth Hill, London EC4V 4AJ, United Kingdom. Registered number: 6404270. Registered in England.