Partial to impartiality
Investors in Asia are turning to fee-based financial advisers for unbiased views, writes Andrea Li
The role of the independent financial adviser is becoming ever more important, as investors are increasingly understanding the benefits of impartial advice.
A survey conducted by the British wealth consultancy Scorpio Partnership found that an overwhelming majority of millionaires in the region recognised financial planning as a core capability for the wealth-management industry. More than ever, they want unbiased advice that can help them manage, preserve and pass on their wealth.
"There is a strong trend across Asia showing investors' desire for independent financial advice at every level of the wealth management sector. That is the direction the market is shifting towards," says Sebastian Dovey, managing partner at Scorpio Partnership.
Impartial advice, advisers say, is best achieved when there is a clear distinction between advice and services provided, and fees rendered.
That's why Britain will ban advisers from receiving commission for recommending investment products by the end of this year. Australia, too, is planning to widen its clampdown on commission to all financial products, while Singapore has just launched an industry review of the financial-advisory sector aimed at raising fees transparency.
To many, the fee-based structure is ideal. The adviser charges a fee for their expertise and time, and the client is free to do whatever he wants with it.
"If you went to a doctor, you would expect him to charge you a consultation fee rather than try to make his living off the prescriptions he gives you. It is the same concept in financial planning," says Rick Adkinson, managing director of Private Capital, one of Hong Kong's few fee-based advisers.