The 2017 Investment Trends Financial Advice Report, compiled off the back of a survey of almost 10,000 Australian consumers, has found strong demand for advice services.
Three million Australians intend to see a financial adviser within the next two years, the report concludes, up from 2.6 million in 2016 and more than double the figure identified in 2013.
In addition, the report confirmed a large contingent of consumers who are warm to the idea of financial advice but do not currently see an adviser.
“A growing number of individuals with unmet advice needs is fuelling growth in demand for financial advice,” said Investment Trends senior analyst King Loong Choi, commenting on the findings.
“Right now, half of Australian adults say there are areas where they would like to be receiving financial advice but currently aren’t, and this proportion has been on the rise since 2014.”
Advisers should be focusing their efforts on retirement planning and budgeting services, the analyst said, indicating these are the growth areas of demand from prospective clients.
At the same time, the report found that the number of active clients is in decline, down 25 per cent from the figure in 2007.
“Client retention remains a key issue, with planners typically losing three clients for every two they gain,” Mr Choi said.
However, he added that many advisers are taking positive steps to counter the decline, with high levels of client satisfaction recorded.
Very suspect survey I’m thinking. It all rest on how the questions are asked or interpreted. It should be crystal clear questioning. EG: Do you intend to pay a financial planner $3000 odd for a vanilla SOA and let them charge you 1% pa on every dollar you have invested regardless of what you need? 90% would decline. This industry is in massive trouble. It’s too expensive to run, it’s too weighed down by compliance. We all know who is to blame. The only valid take out of this survey or report is FP’s are losing more clients than gaining.
Yes, Very suspect article and on exactly what info they base this is sus in itself. Seems to fly in the face of what we all know at a gut level and an anecdotal level. Literally everywhere we see reported these days how generally Australians (not the ‘1%’) are averse to paying planners en masse. This article definitely smells fishy. Agenda, anyone?
The decline in numbers could be due to the clean up of long tails in many businesses. Many businesses may have reported ‘clients’ as clients that they received some form of revenue on no matter how small. Increasingly the definition of active client is clients that you have seen or spoken to in the last twelve months. This and better software which aggregates client groups verses counting each individual and their underlying entities is improving reporting.
FDS and Opt in is playing a part as long time clients continue to have fees thrown at them and no matter what your value proposition you have to expect to lose clients that historically would have stayed with you.