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What Makes Your Financial Adviser Valuable?

May 13, 2017 | Andy Blandford

Perhaps a trick question? Not really. Yes, just like plumbers, builders and property agents for example, there are good ones and bad ones. Regardless of their qualification or promises, you are only truly going to know after they have finished the job and present their bill. Technically, since a financial advisers’ job never really ‘finishes’ in a comparable sense, how do you measure their value [to you].

Qualifications and industry experience are good places to start of course, since these are a good indication of professional depth and breadth. Investment performance history is often a favorite comparison to use, but such might ignore the degree of risk adopted for each client or ignore the timing of the measurement. And what about intangible value? For example, if your professional adviser delivers good returns but disappeared when you panicked; would he be less or more valuable than an adviser delivering average performance that stopped you panicking and thereby you avoided material losses on your investments?

In my experience, every client has a different ‘value’ metric when it comes to their financial adviser, because each value is more an aggregate of tangible and intangible measures experienced and evolved over time. Different clients want different things in different ways, and at different times for different reasons. Similarly, if I was asked to define a ‘value’ metric for any client I would also struggle for the same reasons. Likewise, how would you or I measure our friends in terms of value?