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Better Business

Skills in going from professional sellers of investments to professiona buyers

With changing regulation around the world either in place, or moving to be in place quite soon, there is a fundamental shift occuring in the wealth management industry. This shift in many ways is that people who made their living from the selling of investment products (and were paid product commissions to do so), now are being forced to move to the other side of the table and make a living by charging their clients for buying investments on their behalf.


Those in the industry will be well aware on the substantial investment that has gone into systems, proceses, compliance changes etc in order to support this change. At a simplisitic level it could be that rather than the professionals being paid by the product providers, they are now paid by the client instead under methods some call ‘adviser charging’. OK, now lets move on….

Whilst what could be seen as a small change, there is a very different reality as to the business model of that professional’s business though in this transition in terms of a) exposure to change in revenues b) demonstration of the value to support revenues, c) the perceived value of those revenues to consumers in a world where access to investments on-line has never been easier (and more confusing some would argue !)

Fundamentally the value proposition of professionals has moved form being about access to investments for sale in ‘regulated’ way, to one to how much value do they add in the eyes of the clients. Some key points here:

a) value is now perceived by the client, not the product provider -requiring a considerable change in identity and context
b) with tightening consumer wallets, this value is more transparent and will undergo more scrutiny, especially in a world where there is vast amounts of consumer information and commentary on-line, often around low cost access to investments also

What does this mean in terms of skill sets for wealth advisory professionals ?

I’d suggest that it means about extending skills in understanding client context, demonstrating on going value with ongoing suggestions in terms of investments in a portfolio, and operating a business that absolutely maximises and optimises the value-time equation with clients, not just number of clients.

Whilst many are well equpped to deal with the client facing aspects of this, many are struggling with a componnt of this which is amounting to them essentially have to become portfolio managers / investment managers themselves, which is not suprising as it is probrally not their skill sets. This is a specialist area that is not for the faint hearted, is often multi-dimensional, and can have deep consequences for client portfolios if not properly operated, overseen and managed.

It is this latter aspect of portfolio management that Financial Simplicity helps our clients with, helping them use business intelligence and sysemised workflows to operate such a portfolio management funciton with lower costs and risks, allowing them to spend more time on the essentials… adding value to clients lives.

Stuart Holdsworth

Author Stuart Holdsworth

Stuart has over 30 years of experience in the use of technology for the strategic competitive advantage of businesses in the financial markets and investment industry.

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