Rethinking the traditional advice model: Is a paradigm shift necessary?

Speaking on a recent ifa podcast, Nigel Baker, chief executive and founder of Scientiam, said he envisions a more adaptable and segmented advice approach that caters to the diverse needs of clients.

“Not everyone needs full advice,” Mr Baker said.

“That’s the reality. Not everyone needs and not everyone needs full advice for the rest of their life. I think the model needs to change,” he noted.

He envisions a more flexible model where advisory services are tailored to the varying needs of clients.

“Some might need full advice for a year or two and it might drop down a bit. And some are happy to hover around at that low-level advice for forever, even though they might be fairly complex, they get it and they can just sort of, I suppose, subscribe to part of that service”.

Mr Baker’s perspective challenges the traditional notion of advisory services as a one-size-fits-all approach. He advocates for a more adaptable system that can cater to different client groups, offering varying levels of service based on individual needs and preferences.

“That can also really make an advisory business really efficient and really, really tier its service levels to numerous client groups rather than, again, at the moment, 95 per cent of advisory firms really just service one type of client. They might say they do more than that, but when you lift a bonnet, they really just got one service offering.”

Mr Baker also emphasised the need for advisers to adapt and utilise technology to better serve their clients.

“There are some amazing advisers out there and they’ve got some great knowledge to share,” he said.

Mr Baker stressed that current practices are falling short of utilising technology’s capabilities, even for a relatively modest clientele. “Even for their current 50 clients, they’re not using much technology just to replicate and share that information and engage those clients,” he highlighted.

“If you ask advisers and say, ‘Well, where do your clients get their information from?’ They’ve got no idea. You go, ‘Well, I bet you that the stuff you send out is probably less than 10 per cent of actually what they read.’

“They’re actually Googling other things, they’re getting other newsletters. You are not even able to, even under your own philosophy, and you’ve got a great story and you’ve got a great investor philosophy, all those sort of things. But they’re getting information from all sorts of sources. Even bringing that into making that more efficient, but then being able to share that with more people and giving people ... We see how that can change people’s lives and really help people.”

To hear more from Nigel Baker, tune in here.