The Real Value of Advice

Understanding What Matters Most to Investors

Financial advisers play a vital role in guiding investors towards their financial aspirations. To excel in this role, a deep understanding of what truly matters to investors is crucial. A research report by Morningstar, "Understanding What Investors Value in a Financial Advisor," provides valuable insights that can empower advisers to build stronger client relationships and deliver exceptional value.

The study highlights that while investors appreciate expertise and investment returns, their core priority is achieving their financial goals. They highly value advisers who assist them in defining and strategising for these goals. This underscores the importance of probing beneath the surface to uncover clients' true motivations and aspirations.

As the research suggests, advisers can move beyond standard inquiries by asking deeper, more personal questions. Understanding a client's life vision, family dynamics, and long-term ambitions provides a richer context for financial planning. For instance, instead of simply asking about retirement age, explore what that retirement lifestyle truly looks like for the client. What are their passions? What legacy do they want to leave? This deeper understanding enables advisers to offer more tailored and meaningful advice, fostering stronger client loyalty.

The research emphasises that the quality of the adviser-client relationship is paramount. This involves ongoing, in-depth conversations to adapt to evolving client needs and goals. Encourage regular check-ins that go beyond portfolio performance reviews. Use these opportunities to discuss life changes, shifts in priorities, and any new concerns your clients may have. By consistently engaging at a deeper level, advisers can ensure their guidance remains relevant and impactful in their clients' lives.

The findings point to several key areas that investors value: reliable advice, goal-based planning, behavioural coaching, and personalised support. Notably, one study found that investors reported the highest willingness to pay for an adviser who helps them brainstorm and identify their financial goals. This clearly indicates the value clients place on this foundational aspect of financial planning. 

Click here to read the full article.