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Focus on providing needs-based advice, says AIA

Financial advisers should segment their clients based on their needs in order to deliver better outcomes for both their business and their clients, research by AIA Australia has found.

Commissioned by the life insurer, the Beddoes Institute compiled a white paper, titled The Advice Challenge, based on a survey of 450 advice clients and designed to investigate what they want from their advisers.

The research found that when it came to advice needs, clients could be grouped into three categories – value seekers (59 per cent), personalised advice seekers (27 per cent), and purists (14 per cent).

For value seekers, the top two drivers of value in the relationship with their adviser were 'significant value for money' (17 per cent) and 'quality communications' (13 per cent).

With those seeking personalised advice, the top two value drivers were 'tailored insurance advice' (31 per cent) and 'claims management assurance' (nine per cent).

The 'purist' group reported 'tailored insurance advice' (44 per cent) and 'ethical and independent advice' (23 per cent) as their top two value drivers.

Commenting on the results, AIA Australia chief retail insurance officer Pina Sciarrone said the results indicate that advisers appear to be "managing all clients uniformly and not addressing the specific needs of each client segment".


"By taking this approach, advisers are expending resources to delivering services that are not as valued by clients and missing an opportunity to focus on what matters most," she said.

"The results of the research reveal that by effectively segmenting their clients, advisers may become more attuned to what each segment wants and provide a more valued service designed specifically to its needs.

"By meeting the stated need of each client segment, it's also likely that adviser-client loyalty will increase for all segments," Ms Sciarrone said.