Vanguard unveils barometer of adviser value

Nov 28th, 2013 | By | Category: ETF and Index News

Vanguard Asset Management, a leading provider of index-linked exchange-traded funds, has unveiled an index designed to measure and monitor over time the level of value advisers deliver to their clients.

Vanguard launches barometer of adviser value, called the Value Index

Neil Cowell, Head of Retail Sales at Vanguard Asset Management.

Called the Value Index, the measure is essentially a barometer of client satisfaction in the new post-Retail Distribution Review (RDR), fee-based world.

The index was calculated from the responses of 760 UK advised clients who participated in an online survey, conducted in May 2013, answering questions relating to perceptions of fees, market performance and financial goals.

The initial recording of the index came in at 73 out of 100 (with 100 representing maximum value), painting a promising picture of the adviser landscape, with 41% of respondents receiving high value from their advisers and 26% receiving moderate value.

The research re-affirms that clients who perceive high value from their adviser relationships are more loyal, more profitable and provide more referrals. Furthermore, 17% of all advised clients say that the value they have received relative to fees has increased over the last 12 months.

Irrespective of high, moderate or low value delivered, the clients identified trustworthiness, knowledge and accuracy as the top three most important attributes they look for in an adviser.

The index also sets out the key drivers of value based on those clients who say they receive ‘high value’. Rather than focusing on stock selection, clients get the most ‘value’ from their advisers that help them focus on the long term (92%), provide guidance (78%), and offer a strong personal relationship (94%).

Commenting on the findings, Neil Cowell, Head of UK Retail Sales, said: “One of the positive outcomes of RDR is that it has forced a meaningful conversation about what constitutes value for clients. While 73 out of 100 is an encouraging score, it will be interesting to monitor and track over time the industry’s progress in creating and delivering value.”

He added: “The Value Index will support advisers by helping them identify the drivers of a high value client relationship and allowing them to benchmark themselves against industry standards. Through the Value Index, we are able to provide tactical solutions on what advisers can do to further increase the value they are delivering.”

The research lays out practical steps for every advisory practice to enhance its offering and deliver value. These are:

1.     Define value by structuring an offer that looks beyond the individual client to provide a holistic vision across generations and by clearly defining a meaningful client experience.

2.     Communicate value by documenting and reinforcing client commitment.

3.     Measure value by consistently gathering and analysing client feedback.

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