Wealth advisers urged to offer support, not technical tips

Financial advisers must provide reassurance to clients during the current financial and economic turmoil or risk losing them, top UK wealth experts have warned.

The disruption in the markets means advisers focusing on technicalities and specialist products is no longer enough — broad-based regular communication with clients is essential, especially after the Bank of England warned last week there was a “material risk” to UK financial stability.

This sentiment is echoed across firms featured in a list of the best advice businesses in the country, compiled by FTAdviser, the FT’s specialist publication for the sector.

“Not communicating with clients is everything that was historically wrong with financial services,” said Jessica Ayres, a chartered financial planner for Timothy James & Partners, one of the firms in this year’s FTAdviser Top 100 IFAs list.

Clients had been calling nonstop recently, because they are worried about what the rising cost of living means for their money, she said. “Most clients want to know what we plan to change [in investment portfolios] to cope with persistent higher levels of inflation.”

To not be there for clients to discuss “everything from mortgages to investments” risks “alienating them”, said Ayres, and could lead to losing the client.

Over the past few weeks, most conversations Quilter Private Client Advisers has had have revolved around “reassuring clients”, according to financial planning director Sarah Waring.

This reassurance has spread to not just the client but their families, too. “In adversity, families pull together, and we want to help advisers facilitate this from a financial perspective, ensuring each family member is put in the best position possible,” said Waring.

Neil Padget, chief executive of Top 100 IFA firm Alexander Grace, is keen for his advisers to wade into any topic raised by clients — even if his firm does not specialise in that area — because the client must come first.

He said: “We are here to help our clients and will say why we don’t recommend something, or find out if it’s not something we understand, or we get another professional involved who has the expertise.”

Ayres also mentioned clients have been querying whether they should stop drawing an income from their pensions and investments, fearful of eroding the value of their funds at a time when market performance could be working against them. She said the answers depended on the client and their circumstances, adding: “My job was to explain as much as I could, ensure they were financially OK and keep them calm.”

There has been plenty to cause concern. This year has witnessed Russia’s invasion of Ukraine; the cost of living crisis; the sinking of the good ship sterling and a swath of tax changes dubbed as “Trussonomics”, which forced the Bank of England to do a spectacular, if temporary, volte-face on quantitative easing.

The top firm in FTAdviser’s top 100 IFAs is Johnston Carmichael Wealth, Scotland’s largest independent firm of chartered accountants and business advisers. Next comes Mazars Financial Planning, an arm of Mazars, a diversified London-based accountancy firm. Third is Punter Southall, a financial planning company that grew out of a pensions consultancy.

The FTAdviser list is based on data from Financial Clarity, an ISS Market Intelligence business, which created a long list of 150 companies, selected on gross sales for the year to June 2022.

In choosing the final 100, other — qualitative — factors are given credit, for example, how long firms have been in business, and whether they are either chartered by the Chartered Insurance Institute or accredited by the Chartered Institute for Securities & Investment. Seven of the top 10 have either chartered or accredited status, as do 17 of the top 20.

Of course, there is a choice beyond FTAdviser’s 100 companies. This year, the Financial Conduct Authority revealed there were 43,326 advisers qualified to offer retail investment advice in the UK.

The FTAdviser list is a snapshot of the UK advice profession: large networks, national businesses, and local operations. Every company is different, just as every client has different needs. The full list can be found on FTAdviser.com here: 2022top100.ftadviser.com.

Simoney Kyriakou is editor of FTAdviser