A reform in management fees driven by Customer Relationship Model Phase 2 (CRM II) in Canada, and MiFID II in Europe will encourage the uptake of professional investment advice, writes Silvana Amparbeng, wealth management analyst at Verdict Financial.


Thanks to new transparency regulations, advisers will have the opportunity to make fees more appealing. How can this be true? Simply shaping their communication tools to target different clients, they will be able to shed light on the confusing numbers that populate fees papers and demonstrate the added value of an advisory service.

Data from Verdict Financial’s 2016 Global Wealth Managers Survey shows that management fees are putting clients off from seeking advice more than the lack of trust in advisers or how competent they feel in managing investments on their own. In Canada, concern over fees even surpasses the desire to have exclusive control over one’s portfolio. Most clients are simply scared of professional advice services because they don’t have a clear understanding of the costs involved.


Graphic: The main reasons why high net worth (HNW) individuals choose to invest directly

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Source: Verdict Financial’s 2016 Global Wealth Managers Survey


Advisers should exploit an opportunity to market their services as a value added to ones’ investments to grow their client base and subsequently assets under management. For instance, they can demonstrate, through examples, how higher returns through advisory largely can outstrip costs.

Also, communication channels should be the main focus by making good use of email marketing and new social media solutions to reach out for their clients’ attention, which would be especially appealing to millennial investors.