Fund manager Vanguard has today launched the Value Index designed to measure and monitor the value advisers deliver to their clients. Research findings so far reveal the Value Index sits at 73 out of 100 (with 100 representing maximum value) based on the perceptions of 760 UK advised clients on the categories of fees, market performance and financial goals.
Vanguard says that the Value Index paints a promising picture of the adviser landscape, with 41% of respondents receiving high value from their advisers and 26% receiving moderate value.
The research re-affirms that clients who perceive high value from their adviser relationships are more loyal, more profitable and provide more referrals. Furthermore, 17% of all advised clients say that the value they have received relative to fees has increased over the last 12 months.
Irrespective of high, moderate or low value delivered, the clients identified trustworthiness, knowledge and accuracy as the top three most important attributes they look for in an adviser.
The Value Index also sets out the key drivers of value based on those clients who say they receive 'high value'. Rather than focusing on stock selection, clients get the most 'value' from their advisers that help them focus on the long term (92%), provide guidance (78%), and offer a strong personal relationship (94%).
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Neil Cowell, head of UK Retail Sales, said: "One of the positive outcomes of RDR is that it has forced a meaningful conversation about what constitutes value for clients. While 73 out of 100 is an encouraging score, it will be interesting to monitor and track over time the industry's progress in creating and delivering value.
"The Value Index will support advisers by helping them identify the drivers of a high value client relationship and allowing them to benchmark themselves against industry standards. Through the Value Index, we are able to provide tactical solutions on what advisers can do to further increase the value they are delivering."
The research lays out practical steps for every advisory practice to enhance its offering and deliver value. These are:
1. Define value by structuring an offer that looks beyond the individual client to provide a holistic vision across generations and by clearly defining a meaningful client experience.
2. Communicate value by documenting and reinforcing client commitment.
3. Measure value by consistently gathering and analysing client feedback.

Methodology: Findings were gathered via on-line survey in May, 2013, utilising recognised investor panels. 1,163 participants completed a survey. The margin of error is +\- 2.9 percent. This report highlights the 760 UK advised clients who work with an adviser in some capacity.
Respondents were filtered to ensure that all worked with a financial adviser and made/contributed to the financial decisions in the household. A defined number of participants were identified for the asset levels identified. The asset levels were determined based on an assessment of more than 100,000 surveys returned to Adviser Impact, to reflect the typical distribution of clients working with advisers today.
1. In the first step Adviser Impact assessed client perception of the value they are receiving from their adviser. Adviser Impact asked clients three different questions (value relative to fees, market performance and achieving goals). They provided a rating of 1 – 5 on each of these dimensions. Adviser Impact expressed the averages as a rating out of 100.
2. In order to understand what is driving the highest value, Adviser Impact split clients into three groups based on their responses to the value questions. Adviser Impact named these groups low, moderate and high value. For example, clients in the 'high value' category were more likely to provide a high rating on all three questions, which were equally weighted. (PCA – Principal Component Analysis was used for this step.)
3. Adviser Impact isolated the clients who reported receiving high value and ran a regression analysis to identify the service dimensions most closely correlated with being high value. Adviser Impact identified six and included the top three in the model.
4. Adviser Impact believe that, by delivering on the three things that clients say are most important (Stated Importance) and the three things that were identified as having the strongest influence on high value (Derived Importance), advisers can push more clients into the 'high value' category