Advice groups have an opportunity to add value to their service offerings by implementing stronger strategies that are specifically tailored to client needs.
"Advisers are missing the mark as a lot of them are using the old, traditional approaches," Strategy Steps director Assyat David said.
"The ability for advisers to add value purely by outperforming the market from an investment perspective is becoming more limited, therefore they have to think more about their value proposition from a strategy perspective."
The current processes advisers use didn't give sufficient flexibility to be able to properly think about some of the broader strategies that can be better tailored to the client's needs, David said.
"For example, in portfolio construction a lot of them are relying on the client questionnaire and not necessarily getting full information on the client to be able to cover a more tailored strategy," she said.
"The real issue is to look beyond the questions that are in there, not to stay it's not a good thing, there's just an opportunity to expand on that to tap into what the client's other issues and motivators are.
"There's a real opportunity for advisers to think about this - it's not just about looking at basic financial information but also looking at how involved they want to be with their portfolio."
David's comments come after ASIC's shadow shop results revealed 39 per cent of advice examples were poor. In addition, where advice scenarios did not require investment products, the strategy was inadequate.
The shadow shop results, released last month, also identified that financial advisers didn't necessarily calculate the longevity of retirement funds.
"When you think about a retiree client, one of the key objectives they have is how long their money is going to last, so you'd think that was one of the important aspects to calculate to determine whether the portfolio outcome actually meets that objective of the client," she said.
Whether an investment product is required or not, advisers need to step into a coaching role and go through the strategy with clients thoroughly, David said.
"Some advisers are very good at that but a lot aren't and tend to be focused on selling product in some cases," she said.
Advice groups are only just beginning to review the advice process, as continued economic and regulatory pressures force them to look at their current method and then find ways in which to modify it.
"They have to demonstrate the value they can provide and recommend [and it must] suit specific circumstances," she said.
Advice groups that took up different levels of support and resources to allow advisers to take on a more strategic advice process also had a competitive advantage in the future, she said.
