Why We Partner with Investment Consultants
As financial advisers, we're often asked to be experts in everything – tax law, estate planning, aged care, insurance, cashflow management, and of course, investments. While we pride ourselves on providing comprehensive advice, there's a reality we need to confront: the investment landscape has become extraordinarily complex, and pretending we can master every nuance while serving our clients' best interests is not just unrealistic, it's potentially detrimental to those who trust us.
This is why our practice made the strategic decision to partner with specialist investment consultants, and it's been one of the best decisions we've made for our clients and our business. Here's why.
The Complexity Challenge
Let me be honest. Twenty years ago, a competent financial adviser could reasonably stay across the major asset classes, understand the key investment managers, and construct portfolios that served clients well. Today? The investment universe has exploded. We're dealing with multiple asset classes beyond traditional shares and bonds – private equity, infrastructure, alternatives, emerging markets, thematic investments, sustainable investing overlays, and countless sub-categories within each.
Then there's the manager universe. There are thousands of investment managers globally, each with different philosophies, processes, and performance characteristics. New managers emerge constantly, while established ones experience style drift or team changes that fundamentally alter their approach. Staying on top of this requires full-time, dedicated research – not something you can do between client meetings and compliance work.
The regulatory environment has also intensified. Design and Distribution Obligations, the Quality of Advice Review implementation, and heightened expectations around best interests duty mean our investment recommendations face greater scrutiny than ever before. Can you genuinely say you've conducted thorough due diligence on every investment you recommend? Can you articulate why Manager A is superior to Manager B beyond reading their PDS?
What Investment Consultants Actually Do
There's a misconception that investment consultants simply pick funds. That's like saying surgeons simply cut people open. The reality is far more sophisticated.
Specialist investment consultants conduct institutional-grade research. They're meeting with fund managers quarterly, analysing performance attribution, understanding changes in investment teams, evaluating risk management processes, and conducting operational due diligence that goes well beyond what individual advisers can achieve. They're visiting managers' offices, interviewing portfolio managers and analysts, and building relationships that provide genuine insights into how these businesses operate.
They're also monitoring macroeconomic trends, asset class valuations, and market dynamics on a full-time basis. While we're preparing SOAs and meeting with clients about their retirement plans, they're analysing whether emerging market valuations justify an overweight position, or whether credit spreads suggest it's time to reduce fixed income exposure.
Importantly, good investment consultants provide independent research. They're not beholden to product manufacturers or platform providers. Their recommendations are based purely on research merit, not distribution agreements or soft-dollar arrangements.
The Benefits for Your Practice
Since partnering with investment consultants, we've experienced tangible benefits that have transformed our practice.
Time efficiency: We've reclaimed approximately 15-20 hours per week previously spent on investment research and portfolio construction. This time now goes directly into client relationships, business development, and strategic planning. Our client review meetings have become richer because we're focusing on what matters to them – their goals, concerns, and life transitions – rather than justifying our latest investment switch.
Better client outcomes: This is the big one. Our clients' portfolios are genuinely better constructed. The diversification is more sophisticated, the manager selection is more rigorous, and the ongoing monitoring is more comprehensive. We've seen improved risk-adjusted returns across our client base, which ultimately means clients are better positioned to achieve their financial goals.
Scalability: As our practice grows, we're not constrained by investment research capacity. We can take on new clients knowing the investment solution is robust and defensible, without needing to hire additional investment specialists in-house.
Enhanced professionalism: When meeting with sophisticated clients – business owners, executives, professionals – being able to discuss our partnership with specialist investment consultants elevates the conversation. It demonstrates we understand the limits of our expertise and prioritise their interests over our ego.
Addressing the Objections
I hear the pushback: "But investment advice is core to what we do as advisers!" Absolutely. But there's a difference between providing investment advice and conducting primary investment research.
We still construct portfolios. We still determine appropriate asset allocations based on clients' risk profiles, time horizons, and objectives. We still make tactical decisions about when to rebalance or adjust exposures. We're still providing investment advice – we're just leveraging specialist research to make better-informed decisions.
Some advisers worry about cost. Yes, there's a fee for accessing investment consulting services. But consider the alternative cost: the time you're spending on research (which could be generating revenue elsewhere), the potential cost of suboptimal investment decisions, and the risk cost of not having rigorous due diligence processes. When we calculated our true cost of conducting investment research in-house versus partnering externally, the external option was actually more cost-effective.
Others worry about losing the client relationship. In our experience, the opposite has occurred. Clients appreciate that we're accessing specialist expertise on their behalf. It reinforces that we're acting in their best interests rather than pretending to know everything.
The Future of Financial Advice
The advice profession is evolving toward specialisation. Just as medical professionals increasingly work in multidisciplinary teams, financial advisers benefit from partnering with specialists in different domains. Investment consultants are one piece of this puzzle, alongside tax specialists, estate planning lawyers, and aged care advisers.
The advisers who thrive in the next decade won't be those who try to do everything themselves. They'll be those who orchestrate specialist expertise to deliver superior outcomes for clients while building sustainable, scalable businesses.
Our partnership with investment consultants has made us better advisers. We're more focused on holistic planning, we're having richer client conversations, and we're delivering better investment outcomes. Most importantly, we're sleeping better at night knowing our recommendations are built on institutional-grade research conducted by dedicated specialists.
This article provides general information only and does not consider your specific circumstances. Before making investment decisions, consider speaking with a licensed financial adviser.