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What advisers are saying: Rational vs emotional

Phil Wickenden Technical Area 200

I said that a practical bicycle was required to get from A to B while saving unnecessary expense and staying (getting) fit. I bought a BMX. I purport to be a vegetarian but happily eat fish and have way too many shoes. 

There is often a difference in what we say and what we do. Theories of practice may be ‘espoused’ (ie what we say we believe in) or ‘in-use’ (the way we actually act). And there are a whole bunch of things that get in the way and influence the gap between the former and the latter.

While fund range, cost and admin are primary drivers of the selection of offshore solutions, at least based on what advisers tell us, do not underestimate the influence of advisers’ past (and current) experiences with providers. Platform use also dictates product destination to a large extent in spite of the importance of (talked about ad infinitum) suitability.

As robust as many financial planning processes have become, experience still plays a significant role in provider selection (based on service, support, processing and that most fuzzy of things called ‘feeling’) whether we like it or not. Those providers that advisers can rely on have priority, or at least first dibs (all things being relatively equal).

As much as a full range of solutions must be (demonstrably) considered, in practice once advisers are happy with a provider for any particular product there is a high propensity to go to them first, making the act of dislodging incumbents a challenge.

And this should not really be a surprise. Rationality depends, to a degree, on emotion and motivation is driven by feeling, not intellect.

In his book, How We Decide, Jonah Lehrer points out that motion and motivation share the same Latin root, movere, which means ‘to move’, claiming “The world is full of things and it is our feelings that help us choose among them”.

Our research shows Transact and Skandia are the two ‘preferred’ destinations for both offshore bonds and funds with Standard Life and Axa also featuring in the top five.

It’s notable that Skandia, Axa, Canada Life, Transact and Standard were top of advisers’ minds in association with the delivery of good support across a number of metrics (for offshore solutions) but here’s the real kicker: when scoring each support component individually, Novia, IOMA, Friends Life and LGI performed more robustly. What’s caused the dissonance? I do not know, but it isn’t rational, that’s for sure.

Phil Wickenden is managing director of So Here’s The Plan


All quotes have been taken from interviews with qualified financial advisers


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Natixis Global Asset Management’s quarterly Portfolio Barometer offers insights into UK financial advisers’ model portfolios and the allocation decisions they are making. Natixis’s Portfolio Research & Consulting Group works with financial advisers and other intermediaries to analyse and enhance their model portfolios and help them develop investor portfolios suited to today’s complex markets. The Portfolio […]


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