Philip Kewin
Zurich Financial Services Australia Limited (Zurich) is urging the financial advice profession to accentuate the positives, as new research shows adviser sentiment is at its lowest level in two and a half years.
The Zurich Risk Adviser Sentiment Index regularly tracks adviser sentiment across five key indicators, including regulatory environment, long term business viability and consumer demand.
The December 2014 index results – compiled for Zurich by Beaton Research and Consulting – revealed plunging adviser confidence across all measures, headlined by more negative assessment of the regulatory environment (down 14 percent), long term viability of advice practices (down
11.6 percent) and short term sales outlook (down 10.1 percent).
Mr. Philip Kewin, Zurich’s General Manager Retail Life and Investments, said the results were unsurprising, given a backdrop of ongoing negative media coverage and the release of the ASIC and Financial System Inquiry (FSI) reports in the latter part of 2014.
“Advisers found 2014 to be very challenging from a reputational perspective, especially in the wake of the ASIC Report and the negative tone of the subsequent dialogue,” said Mr. Kewin.
“Our research shows this hasn’t just impacted adviser mood, it has also flowed through to bottom lines; nearly one third of advisers indicated the negative publicity had led to a drop in revenues for their businesses.
“Worryingly, one in ten of those surveyed believe their revenues have dropped by 10 percent or more, purely as a result of the reputational damage the advice profession endured last year,” he said.
Despite evidence that advice customers themselves are highly satisfied with their adviser across several important metrics, including customer service, trust, and value for money, negative perceptions are still dominant in the overall community, contributing to a myopic view of the health and future of the advice profession.“In the rush to focus on the implications for adviser remuneration, most people have overlooked the fact that the ASIC report was in fact very pro-advice and very supportive of the role advisers play in delivering outcomes for their customers and the community overall,’ said Mr. Kewin.
“Zurich’s response therefore is to accentuate the positives, and focus on the ways we can partner with advisers to improve the quality and accessibility of advice.
Zurich’s longstanding commitment to raising the bar of professionalism amongst advisers is brought to life through its Success by Design program of educational and research resources. The program – which includes a recently announced partnership with 19Thirty – is all about sharing best practice in client engagement, strategic advice and practice management, to help lift the quality, the reputation and the accessibility of advice.
“The events of the last year have driven a wedge between consumers and advisers, yet it’s clear that the advice industry plays a vital role in helping people protect and build their wealth and in lifting the level of financial literacy throughout the community.
“Rebuilding trust within the profession won’t be achieved by changing remuneration alone; it requires improving the overall customer experience, through the convenience and efficiency benefits of technology, through more emotionally intelligent advisers and through a greater
appreciation of the benefits quality advice can bring,” said Mr. Kewin.