AFA: What consumers really want from their advisers

Brad Fox – CEO – AFA

What financial advice clients really want from their advisers is a strong professional relationship.

This is one of the findings of New Frontiers, a white paper which assessed the views of over 12,000 financial advice clients over a period of four years, conducted on behalf of the Association of Financial Advisers (AFA) by Business Health, sponsored by AIA Australia.

Speaking at the launch of the white paper in Sydney today, AFA CEO Brad Fox said the research reveals that clients rate the relationship aspects of the financial advice process most highly. “Relationship aspects include the business relationship, the professionalism and the support staff of the advice practice,” he said.

“And in these areas, it is very encouraging to discover that the difficult job advisers have, of creating relationships and trust, is being done very well in the eyes of clients.”

Mr Fox said clients who believe they have a close business relationship with their adviser are far more satisfied across all areas. “Most people surveyed – 73% – feel they have close business contact with their adviser and these clients, on average, rate their adviser significantly higher across all areas than those who do not,” he said.

The white paper also uncovered some great opportunities for the financial advice profession.

“Clients were far less satisfied with many of the process driven areas of the practices, including reviews, communication and implementation,” Mr Fox said. “This presents advisers with a great opportunity to improve on these aspects of their service delivery.”

Clients want personalised, proactive, regular communication that talks specifically to them and a review process that covers their specific life goals, not just their investments and/or policies.

“It is clear that the review and communication gaps across the industry need to be
addressed,” Mr Fox said. “The opt-in and fee disclosure statement requirements of FoFA make it even more compelling to act now to address these gaps.”
 
Mr Fox said the white paper provides evidence to support many of the long held assumptions about what contributes to superior practice performance. These are:

• The value of seeking client feedback
• The importance of segmentation
• The outstanding difference regular, personalised and targeted communication has on profitability
• The gender impact
• The value of being referable.
 
Pina Sciarrone, AIA Australia’s Head of Retail Distribution said the white paper identified a number of areas where advisers could use practical support to implement change. “AIA Australia’s Client Development Managers have found advisers are very receptive to any support  which will assist them to grow and develop their businesses,” she said. “This white paper gives us the opportunity to bring empirical evidence to the advice market on how structured service improvements not only help strengthen adviser/client relationships but also improve advice practice profitability.”
 
The white paper was produced following a detailed analysis of the level of client satisfaction based on 12,000+ active clients who completed the Business Health CATScan survey since 2008. The Business Health CATScan allows clients to rate their adviser’s performance in nine Key Performance Index (KPI) service delivery areas.

Terry Bell, Business Health, said, “It’s rare for research across a number of years and 12,000 respondents to be available, but the Business Health CATScan results are irrefutable proof that advisers can dramatically improve practice profitability through increasing client satisfaction from methods as simple as an effective communication strategy.”