Scaled Advice Not Just for Mums and Dads


High-net worth clients are not always interested in receiving a holistic, comprehensive financial plan, according to new research from Investment Trends.

The researcher’s 2012 Advice and Limited Advice Report found that the demand for scaled advice is not restricted to so-called ‘Mum and Dad’ investors with limited funds.  Instead, says Investment Trends, there is a demand for what it calls ‘modular advice’ among high-net wealth clients.  This involves the provision of standalone advice services, based on a specific need at a particular time.

“When you factor in realistic costs, only 6% of Australian adults intuitively favour the comprehensive, face to face, regular review model of advice delivery, while 43% prefer some other model of receiving the advice they need,” said Investment Trends Principal, Mark Johnston.

… only 6% of Australian adults intuitively favour the comprehensive, face to face, regular review model of advice delivery

“The reality is many high-net worth clients also want specific advice, are willing to pay for it, but have no interest in an ‘all you can eat’ advice model at the current time.  We should really be talking about modular advice, not scaled advice.  And we must recognise that demand for modular advice is present at all points of the wealth spectrum,” he added.

The annual report also found that while the number of people who engaged a financial adviser had fallen 20% over the past five years, client advocacy and satisfaction had grown.  In 2012, planners achieved a ‘net promoter score’ of 18%, a considerable improvement from -6% five years earlier.  The net promoter score measures how likely a person is to refer others to the service, which Investment Trends says is of particular relevance to the advice industry, given that most people looking for an adviser will ask their friends for a referral.

“It’s always harder to say nice things about your adviser when your investments have just plunged, whereas this year’s survey followed a 6-month rally in equities.  That said, you can clearly see the work planners are putting in with strong improvements in client experience around technical knowledge, tax expertise and clarity of how fees are calculated,” Mr Johnston explained.


  1. Scaled advice or holistic advice- really how much difference is there in pricing. We have fixed costs to cover- the difference between the two models in price, I believe is small and ask yourself this question–will a can of worms be opened with scaled advise? There is always some smart A out there that will cause an issue with a claim, you “may” win but the damage is already done to your reputation. Stick with full advice unless your disclaimer is written by a silk and even then there may be holes to fall through.

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