CoreData’s Keys to Growth report, which surveyed more than 1,500 advised and non-advised consumers in September, found that as many as 30 per cent of Australians who currently have a financial adviser are at risk of ending that relationship.
Frequency of contact with clients was listed as a major factor in the level of flight risk, with the report segmenting advised consumers into ‘bonded’, ‘firm’, ‘loose’ and ‘at risk’ categories.
“Many Australian advisers are making the fundamental mistake of not keeping in regular contact with their clients,” said CoreData head of advice, wealth and super, Salvador Saiz, commenting on the report’s findings.
“Markedly improving client retention is as simple as picking up the phone and scheduling in a meeting, but we see that many advisers, especially those with high proportions of clients who are in danger of leaving are failing to do this.”
The longevity of an existing advice relationship does not guarantee retention, the report stated, with “close to one third of those classified ‘at risk’ [having been with] their current adviser for the past 10 years”.
The report found that ‘trust’ and ‘rapport’ are considered more significant decision-making factors than fees, with two in three ‘bonded’ clients indicating they would not switch advisers if they were offered the same service for less money and 44.4 per cent of ‘at risk’ clients saying they would switch to an “adviser they could trust”.
At the same time, the research indicated there is significant upside for advisers in the untapped advice market, with two in three Australians over 18 years of age currently unadvised.
“There is a huge opportunity for financial advisers to target the large market of unadvised Australians, and making the most of this opportunity is not difficult,” Mr Saiz said. “The top things that an advice seeker wants are help setting their financial goals, and ability to demonstrate expert advice on investment strategy, super and tax.
“Most advisers already possess these abilities, all they need to do is get the message out there.”
While a majority of unadvised respondents did not know which adviser they might choose should they opt to enter a professional advice relationship – which “close to half” indicated they intend – Commonwealth Financial Planning topped the list of dealer groups “likely to be used”, followed by AMP Financial Planning.
James…..really? It would be clear to those who face clients every day that the current regulations are not really client focused, and if they were, they have certainly become more about protection from FOS complaints etc. I think we are seeing more client contact…but not the sort of contact that a client would thinks adds any value to their situation. That’s the problem. Same old processes, same old risk profiling, same old SOAs but getting larger, now an FDS…oh here’s a new FSG by the way…all great value adds.
This report emphasizes the need for Advisers to become more client oriented and stop complaining about the level of regulations. If you don’t want to play the game by the obvious rules then go do something else.
‘Commonwealth Financial Planning topped the list of dealer groups likely to be used, followed by AMP Financial Planning.’ just choked on my weeties after reading this…say what? Just goes to show that the blinding ignorance of the general public still exists, after all the dodgy advice delivered and the crooked managers that reaped huge bonuses during the ‘Storm’ and ‘Nguyen’ disasters.
I’m sorry…I’m too busy generating 45 page SOAs and preparing FDS correctly and making sure my other compliance matters are up to date. Did you say get new clients…didn’t think we were encouraged to do that these days.