Who is really to blame?

With any profession, you have the good, the bad and the ugly.  And let’s face it, the financial advisory industry is no different.

Most certainly there have been some bad stories – we’ve all heard them – but what about the good stories?  What about the financial advisors (IFAs) who really look after their clients?

You rarely hear about the ones who do right by their clients.  We think this is mainly because a client doesn’t want to publicly disclose their personal investments when they are performing well.  Of course, when a client is disgruntled and in financial upset, you can most certainly guarantee you will hear about it.

Nowadays, IFAs are much more qualified than they have ever been. They need to be.  Retail clients (an individual investor or a small business as opposed to a major financial institution) are much more investment savvy than they were 10 years ago.  Retail clients now have much more access to multiple asset classes and are much harder to please.

The “one size fits all” approach doesn’t work anymore.  Clients now understand the importance of concepts such as compound growth over time and how annual charges can really add up.

When clients become upset with their IFAs, the reasons are always the same. Why am I paying so much per year in fees? Why can’t I access my money for another 20 years? Why are my returns so poor, compared to the stock markets?

But are IFAs really the ones to blame, in this scenario? They don’t hold clients’ money; the pension providers do.  Are IFAs to blame for recommending these expensive products to clients, when this is all the offshore pension providers allow IFAs to present to their clients?  If a friend recommends a product to you, and there is a better alternative that they aren’t aware of, was it their fault?

If a client is in a retirement policy that charges them 7% a year in fees, and they are expecting 5% a year in net growth, the bar has been set pretty high. 12% to be exact. These returns cannot be achieved from mutual funds in anything other than a strong bull market or by assuming considerable risk of capital loss, so the pressure on IFAs is unreasonable from the very start of the process.

With global equity markets at all-time highs and now experiencing significant levels of volatility, beating the charges on your investment plan and securing above inflation growth could prove even harder for IFAs to deliver.

At Berkeley Assets, we offer an alternative to overpriced long term pension plans. We are firm believers that expectations should be managed from the start. We don’t make bold claims about guaranteed double digit growth, year on year. We don’t make claims that we are the right fit for everyone. But one thing is certain, we make sure we are transparent from the outset.

Clients can sleep easy knowing that their hard earned money is growing, at above inflation rates, safely over short to medium terms. And IFAs don’t have to worry every time a client rings their phone.

Download our retail brochure for more details.