The latest ifa straw poll found that 19.5 per cent of surveyed planners still rate investment returns as the most highly valued quality by clients, despite a recent Association of Financial Advisers white paper finding that 82 per cent of clients think interpersonal skills are more important.
Speaking to ifa, AFA chief executive Brad Fox said there is a “gap of expectation” between what advisers think they need to provide and what clients actually value.
“Those advisers need to be able to change the shape of their conversation with clients, because they don’t control investment returns, the market does,” Mr Fox said.
“What is important about having a great relationship is that it lets you communicate the right information and when the relationship weakens, the ability to share often disappointing information is compromised.”
“In a time of falling markets and lost super, that is the most important time to have a great communication with your client… because it’s at that point the client is really willing and really able to get advice.”
The straw poll found that the majority of advisers are focusing on a holistic advice model, with 56.7 per cent citing interpersonal skills as the most valued quality by clients.
16.9 per cent and 7.2 per cent valued technical skills and professional reputation respectively.
Mr Fox said that with the Future of Financial Advice (FOFA) only a week away from implementation, it is more important than ever that advisers work on their client relationships.
“The industry does need to work on [the holistic model]. I think over the last four or five years with FOFA and the global financial crisis (GFC) combined, a lot of advisers have been distracted away from the most important element [of advice] which is how to build the relationships,” Mr Fox.
“But when clients are talking about the review process they don’t think it’s really around reporting the investment returns or the cost of the premium on income protection.”
“They see the review as being ‘is my adviser in touch with my holistic goals, my big picture, my long term?’”
Joe.. Assuming all advisers have the technical expertise, what is the differential advantage. Client engagement, soft skills call it what you like. The honest, ethical and good communicators will always have a loyal and growing client base. The fries and next please operators are the dinosaurs. Just keep doing what you do best and don’t worry all the noise.
Many from within the industry believe that the provision of promises (like greater returns) outweighs the provision of customer engagement, they rely on the premise that results drive customer satisfaction. Things work ok when promises are met, what happens when promises are not able to be met? How do you satisfy disgruntled clients when they do not know you other than as a financial adviser (aka financial scapegoat)? If you dont regularly engage with your clients; you will never be seen as anything other than disposable/replaceable/sue-able. What happens when something comes off the rails? How do your customers react when confronted with bad news? Do they blame you personally? Do they afford you the time to explain the situation? Regulation provides a compliance framework that allows the articulation of the terms of engagement; there is one skill that can never be legislated for, the interpersonal skills that are required to build trusting relationships with clients.