When is a small advisory firm better than a larger one?

Customers looking to choose an advisory firm to look after their investments face a difficult decision. How will they know if the adviser is right for them? Should they go with a big firm or a small, independent financial advisory business? Does the size of the firm even matter?

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Value

One priority that is placed high on many customers’ lists is how much the service will cost. While this is important, price shouldn’t be the deciding factor. It’s better to consider whether the value of the service received is worth the fees. According to Investopedia, it’s important to verify the firm’s or adviser’s credentials. That includes checking that they have the relevant qualifications, looking at their work history, and talking to current and past clients if you can. After all, you’re hiring them to work for you.

Personalised

Financial advisers themselves have said that the size of the firm can have an effect on the depth of the customer relationship and which services are offered. Advisory firms range from global wealth management businesses with thousands of advisers managing trillions in client assets to a one- or two-person shop operating from home. One of the advantages of large firms is continuity of service. If an adviser leaves or goes on holiday, they will have someone to replace them in a seamless transition. However, while they have a larger pool of expertise to match clients with, advisers frequently serve very large numbers of customers, which can erode the personal touch.

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For that reason, some clients prefer to go with a smaller firm for the greater level of personalised service and a more hollistic approach. Very small firms may not be able to meet all of the clients’ specific needs, unless they are backed up with robust back office systems for financial advisers that are designed for smaller, independent businesses. With developers like https://www.intelliflo.com/ providing innovative systems such as these, smaller IFAs are more able to compete in the industry.

Does size really matter? Evan Beach, a certified financial planner at Campbell Wealth Management, doesn’t think so. Company size is only one factor in deciding which firm to go with. Ultimately, the choice should be about what you feel most comfortable with, and it’s worth having the patience and taking the time to find the right person.