YOUR PRACTICE-Advisers look to lure do-it-yourself investors

Mon Feb 10, 2014 3:53pm EST
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article | Single Page
[-] Text [+]

By Andrea Hopkins

TORONTO Feb 10 (Reuters) - While financial advisers have struggled against headlines that suggest their fees and rates of return don't offer enough benefits to ordinary investors, South Carolina adviser Kent Thune said he's very clear about how he helps his clients.

"The number one value advisers provide is not picking stocks or asset allocation or timing the market. It is protecting the clients from their own behavioral mistakes," said Thune, a certified financial planner and founder of Atlantic Capital Investments in Hilton Head Island, South Carolina.

Five years after the financial crisis ransacked investor portfolios, advisers are struggling to convince clients to come back to professional management, particularly as sophisticated and low-cost online tools pop up to feed the do-it-yourself (DIY) market.

Shifting focus from much-hyped rates of return to promises to keep investors on track and focused on their financial goals is the new mantra in wealth management - with advisers likened to the personal trainer that gets the client to the gym.

"People tend to compare returns pre- and post- cost of advice, and say the value isn't there ... What they are missing is the benefit the consumer gets from the advice," said Paul Lorenz, executive vice president and general manager, retail markets, at Manulife Financial in Toronto.

Pointing to a 2012 study sponsored by the Investment Funds Institute of Canada, which represents the fund companies, Lorenz said advisers are key to boosting savings rates.

The study showed households that use a financial adviser save at twice the rate of households that are passive investors and not using an adviser.

"It's less about the investment and more about creating the plan and creating the discipline and having people save more," said Lorenz.   Continued...