Closing bell: Investment is no one-off - it needs plenty of attention

SCORES of individuals have felt let down by their experience of consulting with someone offering investment advice, and in too many cases they have every right to feel aggrieved. But what do investors using advisers look for or expect in terms of service?

This is a very interesting area to explore, as it could be argued that a lack of understanding on either side of the relationship can often result in a less than ideal outcome.

It should always be remembered that for many, making investment decisions can be a one-off experience. They may be investing a lump sum that became available at retirement, or perhaps an inheritance, for instance. So, it is not unreasonable to accept that many investors will have little if any conception of what to expect, and often are happy to be led by the first point of contact, whoever that might be.

Sadly, on the advisory side of the relationship it is still too common to encounter advisers or indeed businesses who view such clients as simply providing capital to be invested, and who therefore apply a transactional approach. The investment industry has always effectively encouraged such behaviour, by providing often ludicrous initial commission payments.

Consequently many investors have unwittingly become victims of a rather loaded system which pays little heed to ongoing advice and service.

I discussed this with a business acquaintance, who suggested that investors who decide to use professional advisers are essentially looking for someone who knows a bit more about investment matters than they do, and who will be in regular contact with them over future years.

This means an adviser who is prepared to contact them when their portfolio might be valued at less than it was at the outset, or below the previous valuation, as well as when things are going well. The person expressing this view has never worked in an advisory capacity, but has dealt with advisers for over 30 years and is, in my opinion worth listening to. His view is extremely simple, but like so much in life is also all the better for it.

It is not appropriate to use this column to promote a service, or to seek to differentiate myself from any other advisers, but I do believe passionately in the need to keep in touch with investors over the long-term and to remain mindful of the duty of care to which they are entitled. It is very important to remember that investing is an ongoing process and not a one-off transaction. Equally important from the adviser perspective is the fundamental fact that we are dealing with other people's money, not our own.

In conclusion, the key point I am making is to urge investors to give more consideration to what they expect from an adviser and to seek such a relationship.

If it is clearly understood by both parties that what is being developed is an ongoing professional relationship, then the results are likely to be far more rewarding for both.

• Ken Taylor is director at Mackenzie Taylor Wealth Management.