Speaking on the ifa Show podcast, the managing director of Financial Advice Matters, Darren Smith, spoke about where he sees the future of the advice industry heading.
He said clients will be more vigilant in questioning the value of advice that is being delivered to them, which means advisers need to become better at not only delivering value, but also communicating and articulating that value as well.
Mr Smith said it is the skill his practice is spending a lot of time on – helping advisers connect with the people they’re in front of.
“When people have a strong connection and they see value, things like fees become secondary. They’re still important, but I think a lot of our focus is how do you actually connect and make that a more engaging experience,” Mr Smith said.
“Through our work on education, we’re trying to change that perception of we’re trying to sell you something, because unfortunately the industry has created that feeling for most people. People don’t turn up to sessions that they get value out of because they’re afraid they’re going to get sold something.”
Listen to the full episode now.
The value of advice is something that is very difficult to quantify in the short-term. Immediately after implementing advice for a client, who can you definitively say that they are in a better position? They may have started to put the building blocks in place, but if you are looking at a 20 year time horizon, the advice & strategies take time to mature. The case of Atkins recently is a perfect example. A long term strategy of matching property and SMSF could be a great combination, but because some ‘experts’ have a preference/bias for equities the guy gets pinged for 3 yrs. Have they made the clients wind up their funds? sell the properties and go back to Australian Super? No. And why not? because even these geniuses have no idea where the share market will be in 6 months, let alone 20 years. Do they tell clients to sell down to cash when share markets suffer a correction? Or do they emphasise the long term nature of equity based investing? how is property any different? I dont really care either way, we’re for clients taking action, to clients making a start, to clients getting involved & engaged with their financial futures. What we’ve seen with clients who establish any sort of investment – shares or property – is that they are typically more engaged and motivated. Action breeds results and there is much in this whole debate flowing from the RC that will stifle anyone from doing anything for fear of getting pinged by a regulator looking to swing the pendulum too far in the other direction. Interesting times to be in advice…
The value you are talking about is easy to create for clients the value for money is much harder , when we have to do 30 hours of work to change a super or recommend salary sacrifice , there is not much value for money there
Value based on…peace of mind or $$$