Australian clients more likely to stick with their advisers

EY’s Global Wealth Research Report revealed that less than a fifth (18 per cent) of Australians say they are likely to change their primary wealth provider within the next three years, compared with the global average of 29 per cent.

Even so, 22 per cent said they still intend on moving more than half their portfolio away from their primary wealth provider in the next three years, which EY said points to a continued need for wealth managers to “evolve their offerings”.

Notably, the report found that Australian investors are more likely to use a private bank as their primary adviser (19 per cent), compared with both global (13 per cent) and Asia-Pacific (13 per cent) levels.

When it comes to how Australians are choosing their adviser, investment performance was considered the most important factor by 70 per cent of respondents, followed by fee structure (62 per cent) and recommendations from family and friends (29 per cent).

Furthermore, the report found that ongoing global market volatility is leading two in five clients (43 per cent) to want additional meetings as they turn to their advisers to help them navigate the challenges of the economic market.

Though advisers should be mindful, EY said, that these conversations could be conducted with the intention of taking additional discretion of the investment portfolio.

This is because around half of Gen X (56 per cent) and Millennial (47 per cent) investors prefer to have their hands more firmly on the controls as they attempt to ride out volatile market conditions.

Rita Da Silva, EY regional wealth and asset manager leader, Oceania, said the survey responses indicate strong relationships between Australians and their adviser, due in part to years of shifting public perceptions of the profession.

“Locally, our robust regulatory guardrails and the work the sector has done to build trust following the financial services royal commission has gone a long way to creating an environment where investors are less likely to be considering a shift in primary providers,” Da Silva said.

“However, with client expectations continuing to evolve in the face of greater market volatility and the potential impacts of the Quality of Advice Review on the local industry yet to fully play out, it is essential that wealth managers keep pace with these changes if they want to maintain their advantage.”