Neil Jones, technical project manager at Canada Life, offers some advice on picking a provider.
As charges become simplified and providers remove high allocation charging structures, it should be a lot easier for advisers to review and compare the charges levied by product providers. The removal of commission will also aid this as it effectively removes the cost of advice from the equation.
So how will providers distinguish themselves and what should advisers be considering when selecting a provider? You may already have a process in place within your business to show which provider is most suitable for a particular client with a specific need or objective.
There will always be a number of advisers and clients that will consider the cheapest to be the best; however, this is not always the case. In some instances, you do pay for what you get, but it is fair to say that cost is not – and should never be – the only factor when considering a suitable provider.
Three things to consider when selecting a provider
Let us consider an analogy: In the retail world, a good example would be John Lewis. Sales figures have remained strong despite the prevailing economic conditions as customers have come to recognise and appreciate the value of pre-sale and post-sale service. This does come at a cost. Another well-known company even advertises itself as being ‘reassuringly expensive’.
So when considering a financial services provider there are other areas besides cost to consider. A financial product, whether it is an investment, protection policy or estate planning solution, is a long-term commitment between the client and the provider. The choice of the provider is largely down to the adviser, who would expect to have a long-term relationship with the client.
The criteria for selecting a provider can vary depending on the product being considered, however, some of the areas to consider are:
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