Greg

ESMA recently issued additional MiFID II guidance, highlighting yet again the need for improvement in how the legislation has been applied to investor suitability assessments.

In giving financial advice, there’s a lot you must communicate to your clients. Doing this in a compliant way used to be relatively straightforward: write what the legislation told you to, send it, and put a copy in the right file. Under the FCA Consumer Duty, things are a bit different.

There’s something different about the FCA Consumer Duty – a quality we haven’t seen in previous directives from the Financial Conduct Authority. As systematic as the guidelines may be, there’s one theme running throughout and that is a thematic insistence on empathy.

Talking about emotions or personalities probably isn’t something your clients expect to do when they visit you for wealth advice. Yet investing is emotional – it’s about hope, and fear, just as much as it is about cold hard figures and in-depth planning.

The more behavioural finance is applied to financial advice, the more it’s misapplied by firms prioritising shortcuts over science and surface sheen over depth of understanding.

Adopting a behaviourally conscious approach to client understanding, enabling personalised advice at scale, is the best way to upgrade customer satisfaction with their wealth-management experience.

The partnership between a wealth management firm and its tech is crucial. The right software can support smooth-functioning and compliant advice, providing a robust framework within which the adviser’s art can flourish.

Firms who harness evolving technology most effectively unlock the ability to serve more investors, more consistently, and more personally.

Centralised investment and retirement propositions can enhance client outcomes through streamlining advisory services. However, they also come with inherent dangers of prioritising a consistent product over a consistent approach for dealing with individual differences.

The Times & The Sunday Times Senior Money Reporter, Imogen Tew undertakes a full journalistic review of Oxford Risk’s Financial Personality Assessment. Find out more now.