Advice is needed

The role of advice in society is most definitely increased in a volatile market environment, as the likelihood that consumers will suffer some capital loss in the medium term, is increased.

Anton Gildenhuys - Director, Client Solutions - Sanlam, says that advice for a client is essential, as an active advisor can and generally does make a difference, and have a profound effect, at the initial stages.

Advice is paid out of the product. The ability to pay for advice outside of the product increases as one moves up the LSM hierarchy, and this has an impact on product design and development.

The affordability and value for money should be where the debate should be, and not on the cost of advice. So what role is there from the product providers' point of view?

Analyse the client's needs, design the strategy to meet the needs, select the appropriate products to execute the strategy.

Product providers try to embed some advice in the product. Quotations are the problem area, and a contentious thought is to remove the projection from the quotation and include it in the needs analysis, simply because the projection should be tailored for each individual client.

There are tools and expertise available and the product providers have access to these items, which can make all the difference to the clients and the intermediaries.

At the moment there are static tools available, which are inefficient. This is an opportunity to get closer to the client from an advisors point of view and perhaps provide an electronic and dynamic tool, which is see-through.

The product provider will know what the client has been offered and the client can see immediately how the product provider is delivering, and while at the same time the advisor is part of the chain.

Editor's thoughts:
* It's time for a no-surprises tool that eliminates any arbitrage opportunities.