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Client demand drives licensee migration

Licensees must be alert to shifting client demands as greater numbers of advisers consider making a switch, a non-aligned group has warned.

According to a statement from Fitzpatricks Private Wealth, licensees would be well advised to introduce metrics to monitor adviser engagement, also referred to as “dissonance”.

“Financial services licensees must be alert to engagement levels amongst their professional financial advisers in order to avoid a renewed round of migration by those advisers to more attractive business operating models,” the statement said.

“This is the view of Fitzpatricks Financial Group, which says the combined environment of greater consumer choice and increased awareness of professionalism is prompting quality advisers to seek new licensee arrangements that offer greater value to them and to the final arbiters of value – the end client.”

Fitzpatricks identifies several potential tensions that may affect the adviser-licensee relationship, which include:

“Client Value – clients are aware of their choices and are seeking greater value (service, delivery standards and client focus) from the licensee supporting their adviser,” it stated.

“Adviser Value – advisers in turn want more from their licensee. This is often in the form of better training, a professional culture or guidance to create more sustainable business structures that service the client’s needs.”

Fitzpatricks Financial Group managing director John McMurdo stressed the need for licensee executives to keep track of sentiment levels.

“Our own polling has yielded a world class +70 result and highly actionable business and cultural insights,” Mr McMurdo said.

“It’s fair to say that in the past, Net Promoter Score (NPS)-style polling of advisers by licensees was spasmodic and findings used sparingly.

“However, a shift in the operating environment – created by a number of high-profile public events – has placed renewed pressure on licensees to get ahead of some potential tensions.”

Sterling Publishing will be releasing ground-breaking research on licensee switching in coming weeks. To register your interest email [email protected]