We have recently finished a fascinating research project conducted on behalf of a large investment manager. The project was to understand and explore what really matters to advice firms when selecting an investment partner. What are the key priorities as well as what advice firms steer away from.

More specifically, we explored how strong, sustainable partnerships can be built, where potential collaboration can falter, and where the opportunities lie for advice firms and their partners to build more robust, lasting and commercially viable relationships.

The findings reveal that blurred roles, overlapping propositions and inconsistent expertise remain key barriers to overcome.

Proposition creep – when collaboration becomes confusion

Large advice firms want partnerships that enhance, not complicate, their proposition. Yet many expressed concerns about “proposition creep”: when the boundaries between advice and investment philosophies, or fee structures, begin to blur.

This lack of clarity risks undermining client communication and regulatory oversight. As one firm explained:

“Sometimes you want a very close partnership, but you’ve got to be clear on your bottom line, your financial outlay, and what you need to charge clients.”

In short, without clear expectations and delineated responsibilities, even the best-intentioned collaboration can create compliance challenges and client confusion.

Ethical walls – protecting commercial integrity

Another major theme was the need for robust “ethical walls” between commercial models. Advice firms remain cautious about any overlap in proposition or target markets, fearing potential conflicts of interest if there could be a risk that a strategic partner’s broader business might also target end clients.

This perceived risk can make firms hesitant to commit. As one participant noted:

“There are firms which, when combined, do exactly what we do. So, how do they manage their interests if we’re to trust they aren’t seeking a competitive advantage?”

Building trust depends on absolute clarity about each firm’s role, responsibilities, and client focus. Without it, partnerships risk being seen as competitive rather than complementary.

The expertise factor – avoiding service dilution

Finally, many advice firms linked the credibility of a partnership to the quality and consistency of expertise, not the size of the organisation. Partnerships built by teams with a shaky team culture and shifting level of personnel risk diluting service levels and strategic alignment.

One firm reflected:

“We once went into partnership with an investment house, but the staff changed all the time. We were sold on the level of CIO involvement but never saw them. When people left, the quality of outcome and value were negative.”

Continuity of key personnel and demonstrable expertise are seen as non-negotiable for maintaining credibility and trust.

This project highlights where collaboration succeeds and where blurred roles, shifting propositions and inconsistent expertise create friction and diminish trust. It is part of our ongoing work to help advice firms and investment partners can build stronger, more sustainable relationships.

Learn more at nextwealth.co.uk or get in touch with us as enquiries@nextwealth.co.uk.

Philip Leigh
Senior Qualitative Researcher, NextWealth

FAQs:

1. What factors do advice firms consider most important when selecting an investment partner?
Advice firms prioritise clear roles, consistent expertise, and complementary propositions. They value partnerships that enhance their offering without creating confusion or overlapping services.

2. What is “proposition creep,” and why is it a concern?
Proposition creep occurs when the boundaries between advice and investment philosophies or fee structures blur. It can complicate client communication, create compliance risks, and undermine trust between partners.

3. Why are ethical walls important in partnerships between advice firms and investment managers?
Ethical walls ensure that commercial interests remain separate, preventing conflicts of interest. They help maintain trust by clarifying each firm’s role and protecting client-focused objectives.

4. How does expertise impact the credibility of an investment partnership?
Partnership credibility depends on the quality and consistency of the team involved. Frequent personnel changes or inconsistent expertise can dilute service quality and diminish trust between firms.