Decline in new client take-up for financial advisers

CoreData's 2012 Financial Planning Shadow Shop report showed that consumers have a stronger focus on the value of planner services, which ties in with financial pressure and the desire for utility following the global financial crisis (GFC).

Other key drivers for the year were the ability to enthuse with the client and ability to influence.
"The findings suggest is it really important that planners are able to demonstrate the quantifiable or tangible benefits of seeking advice, given the cost to would-be clients," CoreData head of advice, wealth and super Kristen Turnbull said.

"Often it is the intangible benefits - such as peace of mind and certainty - that are most valued by those clients who have a dedicated financial planner. However, in the current environment prospects are heavily focused on how much the service costs and what they get in return," she said.

Overall, there was a marginal decline in the ability of financial planners in the industry to acquire new customers, with the industry's Acquire index score falling to 67.8 from 70.1 in 2011.
The industry average in the 'critical intention' category, which shows indication of whether potential clients are prepared to use or recommend the services of a financial planner, fell to 52.0 from 55.2 over the year.

MLC-owned Apogee was awarded CoreData Advisory Group of the Year 2012 after being identified in the report as the licensee with the strongest ability to acquire and engage prospective clients.

MLC advice and marketing executive general manager Richard Nunn said that MLC made the call back in 2005 to drive the industry to change the way it operates.

"We've led the industry in terms of making the advice industry more transparent, more professional," Mr Nunn said.

"We didn't just talk about it, the key thing is we actually acted on it. So we moved very early from conflicted payments to focus heavily on the quality of the advice we are providing our clients and the systems in process supporting that. I think that is what has driven these good [client engagement] results," he said.

Apogee Financial Planning general manager Fiona Navarro also said that the group's success in acquiring new clients reflects the quality and client focus in the network over the past year.
"We have been working hard over a number of years, removing conflict and finding more opportunities to add value through advice and deeper client conversations," she said.

"I firmly believe that demonstrating tangible value will be even more critical in the future and this award is meaningful because it is based on detailed feedback from potential clients," she said.