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Investment research to help with client education

Financial advisers could benefit from research houses helping to educate clients on technical matters, freeing them up to focus more on strategy, says Lonsec’s general manager of strategy and development Richard Everingham.

There’s a strong shift as advisers try to show more value, and they need to help educate clients, Everingham said.

“It’s in a client’s interest and in their own interest in that it frees up time in client meetings to talk about strategic matters,” he said.

As a result, Lonsec is trying to focus more on client educational material in order to help its adviser clients so they can give that material to clients before or after a meeting and use that time for more strategic conversations, he said.

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There has been increased interest since the global financial crisis, in particular, in listed type investments such as exchange traded funds (ETFs) as well as equities and listed investment companies. This has led Lonsec to beef up those areas of its research, including a new ETF journal, short form ETF research, and educational material for advisers’ clients, Everingham said.

The other trend Lonsec has observed in the advice process is a shift from a transactional process to a relationship-based process. There has been a move from a more product-centric advice to a strategic advice process, Everingham said.

“Researchers have a role to play beyond merely [providing] views on products. Advisers will benefit from further granularity and further information on how to construct portfolios, and clients’ ability to construct certain asset classes,” he said.

Investment research to help with client education
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