Financial advisers switching to bespoke investment services for clients are seeing an improvement in their profitability, according to research from Rathbones Group.

The wealth management firm’s study of UK advisers, including those currently offering bespoke services, found that 95 per cent said their company’s profitability had improved.

Furthermore, 97 per cent of the advisers who reported improved profitability said they can now take on more clients as a result.

All advisers said that clients were ‘generally happy’ when offered a bespoke service, with 35 per cent stating that most clients were ‘very happy’.

Rathbones also found that advisers were split on whether it was difficult to introduce a third-party investment manager service into their business, with 51 per cent not finding it difficult and 48 per cent saying it was difficult.

Alongside improved profitability, 85 per cent of advisers said that their relationship with clients had got better after introducing a third-party service, with 24 per cent saying it had become much stronger.

The number of meetings with clients also increased, on average, for 85 per cent of advisers, including 19 per cent who reported a dramatic increase.

Almost nine in 10 (89 per cent) said the risk/return profile of client portfolios had improved after switching to third-party services, with 29 per cent reporting a dramatic improvement.

“Moving clients to a bespoke investment service needs to be carefully considered by advisers, with a wide range of factors to look at,” commented Rathbones head of strategic partnerships and platforms, Simon Taylor.

“The advantages of making the switch are, however, clear from the research, with clients benefiting in terms of improved relationships, and advisers seeing increases in profitability and being able to take on more clients.

“We only expect the demand for advice to increase, as more clients move towards and into retirement. This strengthens the need for adviser firms to build partnerships with discretionary fund management firms.”

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