Advisors’ Service Values Out Of Whack, Fidelity Says

The financial services industry might have its value proposition standing on its head.

Financail advisors must rewrite their value proposition to clients in order to be successful, according to “New Advice Value Drivers,” a report form Boston-based Fidelity Clearing & Custody Solutions, but they’re still focusing on the wrong priorities.

In its analysis, Fidelity found that its clearing and custody clients were suffering from declining organic growth, but that they weren’t necessarily feeling pressured by the decline because of the remarkable run of equities in recent years.

“Cost pressure, regulatory pressure and shifting demographics are coming together to make forms have to think about how they will re-inforce the value that they drive and how to make sure that they are properly paid for it,” says Matt Chisholm, head of Fidelity’s practice management and consultant group.

When the growth of assets from the bull market is discounted, Fidelity found that the assets being withdrawn by existing clients now exceeds the new assets being contributed from existing clients. While existing clients contributed 12.6 percent new asset growth to Fidelity-affiliated firms in 2016, they are also responsible for withdrawing 15.4 percent of their existing assets from advisors.

from FA News


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