The opportunities of providing financial advice for clients
Accountants will be all too aware of the need to provide financial advice to clients – whether this advice comes from them or from trusted partners they work with such as financial advisers or discretionary investment managers.
This demand from clients is continuing to increase: 40% of accountants in a recent survey1 by Investec Wealth & Investment said they had seen an increase in clients asking for financial advice with just 5% saying there had been a decrease.
The top three reasons given for this increase were cited as a growing client base (31%) driving more demand; greater awareness of the need for inheritance planning (27%); and an increase in property transactions/ asset sales among clients (16%).
Interestingly, 15% said they sought to provide the financial advice themselves; 65% said they referred the client to a qualified financial adviser (63%) or a discretionary investment manager (2%).
Investec Wealth & Investment understands how fundamentally important it is to find the right financial adviser and discretionary manager; we also understand that trust is the key factor when accountants select which partners to work with – they are placing their clients and their own reputation in the hands of a third party. It is absolutely vital, therefore, that these firms provide a first-class level of service backed up by the right products.
Financial planning is playing an increasing core part of the overall big picture. Our research found that the top three areas that clients sought actual advice on were: IHT (74%), income and CGT mitigation (56%), and retirement planning and pensions (54%). These are increasingly important issues given the fast-changing regulatory environment.
In addition to financial planning, 33% of respondents think that, over the next two years, increasing numbers of accountants will work with discretionary investment managers.
The top three reasons/benefits of appointing a discretionary manager to manage client funds were cited as:
- Reducing the time taken and administration in dealing with compliance and regulatory obligations (29%)
- Better portfolio performance (20%)
- A robust and consistent investment process (15%)
Investec Wealth & Investment provides a comprehensive discretionary management service and an independent financial planning team, with the emphasis on bespoke client experience. Increasingly, we are working with accountants in Scotland to provide an end-to-end financial advice service.
To manage client money, you need to create trust. Our investment strategy is based on the client’s unique requirements: their personal circumstances, objectives, investment knowledge and experience, together with their attitude to risk. It is important we understand the client’s aspiration and to explain what is realistically possible to deliver over a certain period of time.
We discuss options with the client and create a bespoke investment plan in conjunction with our own Financial Planning team to make sure the investment plan is managed to the client’s aims and objectives in a tax efficient manner.
Investec Wealth & Investment has the experience, the product suite and service mentality. We understand about bespoke client relationships that are fundamental and necessary in re-assuring the accountant that their clients are in safe hands.
ICAS members are reminded of the need to comply with the requirements of The Financial Services and Markets Act 2000 and the ICAS Code of Ethics when introducing or referring clients to financial advisers. Further guidance is available here on icas.com. General authorisation guidance is also available via this link.
1 Pollright interviewed a sample of 71 randomly selected UK-based accountants online in August 2016 on behalf of Investec Wealth & Investment.
About the author
Alastair has helped build Investec Wealth & Investment’s strong presence in Glasgow and across Scotland due to a very high quality client bank built up through a 40-year career in stockbroking and private banking. He is a Chartered Member of the FCSI, a former Member of The London Stock Exchange, Ex Deacon of The Incorporation of Coopers of Glasgow, and a Member of the Merchants House of Glasgow. He is also a regular commentator on BBC Scotland covering global markets.
About the company
Investec Wealth & Investment is one of the UK's leading investment management companies, with responsibility for over £27.5 bn* of client assets.
*As at March 2016
This blog is one of a series of articles from our commercial partners.
The views expressed are those of the author and not necessarily those of ICAS.