Applied Financial Planning
Enhancing the advice value chain
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The global pandemic emphasised many things, not least of which was the importance of financial advice for investors.

As markets peaked and troughed in a matter of weeks, those investors guided by the steady hand of a financial adviser were most likely reassured to take a long-term view.

Investment decisions were made with the considered approach of experience and not a knee-jerk reaction to market volatility.

Yet while the need for financial advice has never been greater, the cost of delivering that advice continues to be a challenge. For many businesses, the focus is on reducing cost, and many progressive advice firms have already moved to a flat fee-for-service model (beneficial during the COVID-19-induced market volatility), in conjunction with outsourcing as much of their back office as possible.

However, managing costs is not the only key to achieving business success. Having worked with many advice practices over the last three decades, my experience shows that the most successful firms have all had a clear and well-developed approach to a number of aspects that make up the advice value chain.

Getting these aspects right can help practices create sustainable business models that are focused on delivering high-quality, cost-effective and scalable advice.

This paper outlines five key factors to enhance the advice value chain and achieve the aforementioned goals.

Clearly defined investment proposition

Establishing a simple to understand, client-friendly investment proposition that can be easily articulated to clients, and implemented in an efficient and scalable way, is a crucial link in the advice value chain. The most successful advice businesses have a common attribute—they are able to take complex concepts and simplify them as much as possible to provide ongoing confidence and peace of mind for their clients.