The UK wealth and investment firm polled IFAs in the country about what difference access to tailor-made investment portfolios made to their earnings.

UK-listed Rathbone Brothers, which offers bespoke wealth management, has conducted a survey of 100 independent financial advisors that shows switching to this model of service will boost IFA profitability. 

Almost all IFAs (95 per cent) said their overall profitability has improved and that 97 per cent said they can take on more clients by going bespoke.

All advisors said clients were “generally happy” when they offered a bespoke service to them, with 35 per cent saying most clients were very happy. The study also found that advisors were almost equally divided over whether it was difficult to introduce a third-party investment manager service into their business. Just over half (51 per cent) said their company did not find it difficult to do this, with 48 per cent saying it was difficult.

Perhaps it’s unsurprising that a wealth manager delivering a bespoke model should have produced a survey that found it is an important profit source for IFAs, but nevertheless the findings shed light on strategy. With technologies including AI rising, this adds to debate on how bespoke options can be delivered to clients in a more cost-effective way. 

“Moving clients to a bespoke investment service needs to be carefully considered by advisors, with a wide range of factors to look at,” Simon Taylor, head of strategic partnerships and platforms, Rathbones, said. “The advantages of making the switch are, however, clear from the research, with clients benefiting in terms of improved relationships, and advisors seeing increases in profitability and being able to take on more clients.”

Rathbones’ bespoke investment management is an actively managed service and is typically designed for clients that have £300,000 ($336,314) or more to invest. 

The study said there are other factors to consider beyond profitability. It was found that 85 per cent of advisors said their relationship with clients improved after introducing a third-party service, with nearly a quarter (24 per cent) saying it had become much stronger. 

The number of meetings with clients also increased, on average, for 85 per cent of advisors questioned, with nearly one in five (19 per cent) reporting a dramatic increase.

Around nine out of 10 (89 per cent) said the risk/return profile of clients’ portfolios also improved after switching to third party services, with 29 per cent reporting a dramatic improvement.

Rathbones commissioned independent research agency PureProfile to interview the IFAs and financial planners including 75 who offer bespoke investment management/discretionary fund management services.