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How much do clients value their adviser?

Vanguard’s latest “value index” suggests clients believe they are getting more value from their adviser than a year ago.

The fund manager has worked with financial services research firm Adviser Impact to measure adviser value, based on the value advisers add beyond investment returns, the value they get relative to the fees paid, and the importance of advice in reaching financial goals.

Last year, the first time the research was conducted, the value index came out at 73 out of 100, which is described as “relatively strong, with room for improvement”.

This year’s results, published today, show the value index has increased to 75 out of 100. This is driven by 17 per cent of clients who say the value they receive from their adviser has increased during the last 12 months, compared to 73 per cent who say value has stayed the same and 11 per cent who say it has declined. 

The results are based on responses from 760 advised clients.

Half of the respondents provided a rating of five out of five for overall satisfaction, up from 39 per cent a year ago.

Vanguard says this is partly due to the RDR, with 29 per cent of clients saying their perception of value has changed as a result of the reforms.

The research shows that investment returns is the most common measure of value used by clients, followed by peace of mind and progress against goals. However, only 36 per cent of advised clients believe they are paying just for investment performance. 

It found that those who perceive high value in their adviser and more likely to provide a referral to their adviser, and more likely to have over three quarters of their assets managed by their adviser.

The research also found that clients who have been asked for feedback from their adviser are more likely to have a high perception of value. It shows 46 per cent of those who perceive their adviser to give high value have been asked for formal feedback, compared to 31 per cent among those who perceive their adviser to give low value.

Those who perceive high value are also more likely to have discussed fees with their adviser in detail.

Vanguard head of UK retail sales Neil Cowell says: “It is encouraging that we are seeing an increase in advised clients’ perceptions of value.

“Vanguard believes the RDR encourages advisers to continue to enhance their value propositions. We found that clients who perceive their relationships with their advisers as high value are more likely to be familiar with the changes associated with the RDR, than those who perceive their relationships with their advisers as low value.”

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