Over-Engineered Client Reports

Adviser: It’s a PET, so it may become liable to IHT if your died within 7 years

Client: Bloody taxman, they even tax you for keeping cats!


This article in FTAdviser touched on something I have been thinking about lately.  According to a research by Coredata, half of high net worth investors agree that financial advisers are experts in their field and 70% would recommend their advisers. This goes to show that many advisers do a great job for their clients.

However nearly a fifth believes their adviser tends to “over-engineer” the advice and often use too many technical terms.

A few days ago, I was speaking to an IFA firm considering using our paraplanning service. The director of the firm told me how shocked he was recently when he saw a 45 page client report prepared by another adviser firm. Unfortunately, the client didn’t understand the report, which is why they came to this adviser.  ‘I know you have to be complaint and everything’ the adviser told me ‘but 45 pages? No client is ever going to bother opening it!’

Sadly ‘over engineered’ client reports are all too common in the industry.  In fact, I am a little surprise the figure in the Coredata research is 20%!  I think it’s much higher.

The amount of pointless information contained in many reports is simply mind-boggling and only a little more than attempts to cover advisers’ backside.  Sometimes, I read a report wondering who it was written for; the client, the regulator or the compliance team.  For instance, do you really need three pages to explain your criteria for choosing a platform to the client?

It is easy to blame the FSA for making ‘everything’ rather complex. But the regulator doesn’t prescribe what a client report should look like and so the buck stops with the adviser/paraplanner to make sure that the report is both compliant and centered on the client.

So here’s a few simple things we do at FinalytiQ to make sure our  reports are something clients have any hope of reading,  let alone understand:

  1. Apply the 10 minutes test. Can the client understand the main elements of the report in 10 minute? Let’s face it, that is about the most they will spend reading it.  And the questions they are going to be asking are ‘what do I need to do and why?’ what are the risks?’  and ‘what is it going to cost me?’
  2. Make good use of tables especially in making comparison of cost and features
  3. Moderate use of simple visual charts to explain how client funds is allocated (before and after the recommendation)
  4. Divide and Conquer! Centralised Investment Proposition documents, Fund Factsheets, KIIDS and all the other regulatory stuff should go in a separate document. If you include these in the same binder with the client report, just the sight alone is enough to  turn the client off
  5. Keep it simple! Avoid the jargon and abbreviations we use in financial service.
However nearly a fifth believes their adviser tends to “over-engineer” the advice and often use too many technical terms
owever nearly a fifth believes their adviser tends to “over-engineer” the advice and often use too many technical terms
Abraham Okusanya
Abraham is the founder of FinalytiQ, a research consultancy for platforms, asset managers, and advisory firms. Recognised as one of the country’s leading experts in retirement income, platforms and investment propositions, Abraham has authored several papers on these subjects and delivered talks to the Personal Finance Society, The FCA and several conferences across the country.

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