As regulatory and licensing fees continue to rise, and advisers continue to bear the costs of the regulatory levies, the cost of advice for consumers also rises. However, the average Australian is generally unaware of these pressures on the industry.
This can create a mismatch between client expectations on what the price tag of a consultation should get them, and what it actually will.
For Mazi Wealth financial adviser Deline Jacovides, educating clients on what happens behind the scenes and the costs of running a practice is an important expectation management technique.
“I just like making people aware of what not financial advisers are. We are not money hungry or greedy or anything like that. It’s just that we legitimately have high expenses,” she told The ifa Show podcast.
“It costs a lot to be licensed, and a lot goes on behind the scenes. We also deserve to be paid a fair wage for the work that we provide and the professional services that we’re providing. I want to help bridge that gap.”
However, the largest challenge in this regard is engaging potential clients. For Jacovides, building a social media presence as an adviser has been useful in this regard.
“I’ve really tried to organise my social media to have the right messaging so that people know there is a lot that goes on behind the scenes and that the advice won’t cost $500,” she said.
“I have always been quite transparent to my audience to explain what goes on behind the scenes.”
Though this wanders into the territory of “finfluencing”, a controversial label that has come under increased scrutiny over the past few years, Jacovides believes that in this day and age of advising, saving time on client education can only benefit the process.
“I like people that have come to me from a finfluencer because it means they’ve come to me with a base level of education and financial literacy,” she said.
“Because the reality is these days we can’t be teaching people from the start of their financial journey.”
Fellow adviser and social media stalwart Ben Nash, founder of Pivot Wealth, also expressed this sentiment.
“They tend to already be trained in your method and that makes it a lot easier for onboarding them and often means that people can get more out of the advice process as well because they’re not hearing about all of these concepts for the first time,” he told The ifa Show in August.
Jacovides concluded that any understanding advisers can pass onto future clients about the advice process is vital and can save time and money for both parties further down the track.
“We used to have more time to be able to commit to educating people and taking them on the start of their financial journey. But we don’t have that luxury anymore. It just costs too much and so we need them to come to us with that education already.”
She added: “So I actually don’t mind working with influencers as long as they know where the line is and know when to refer on.”
To hear more from Deline Jacovides, tune in here.
