Matt Schiffman

Satisfaction rates among Australian adviser clients are the highest in Asia and second highest in all major global markets, according to recent Legg Mason research.

Among those who use an adviser currently, client satisfaction was extremely high relative to the rest of the world. A solid 40% of respondents indicated they were entirely satisfied with their adviser’s services – a figure higher than every other major market than the US, and significantly above the global average of 14%.

The Legg Mason Global Investment Survey looked at the attitudes of 4,200 investors in 20 key markets, including 200 high net worth Australian investors. It found that 36% of Australian respondents currently work with a financial adviser, while 28% were interested in doing so in the future.

When asked for the top three benefits working with an adviser can bring, the majority of respondents (58%) said creating a formal plan to achieve their goals was a key benefit. Globally, just 34% of respondents viewed investment planning as a top benefit, suggesting Australians are particularly fond of a structured approach when it comes to financial advice.

“The survey data overall paints a very positive picture for Australian advisers”, said Legg Mason’s Global Head of Distribution Marketing, Matt Schiffman. “Compared to their global peers, they are doing a great job at meeting client needs, and helping investors to create a long-term plan for success forms a key part of that.”

Australian investors also singled out helping to avoid costly mistakes (47%) and access to investment opportunities they could not get themselves (43%) as other key benefits of working with an adviser.

“Australian investors have enjoyed a buoyant market, and their advisers deserve credit for capturing that upside”, said Mr Schiffman. “By using their expertise to steer clients through the volatility of the post-GFC years, Australian advisers have ensured a loyal and satisfied clientele.”

Despite the high overall level of satisfaction, investors nominated several areas where advisers could improve, including lower advisory fees (36%); being more proactive (30%); and looking for more innovative investment solutions (24%).

“There is always room for improvement in any industry, and financial advice is no different, despite the high overall standards we observed in Australia”, said Mr Schiffman. “Local investors are after a back to basics approach with more of the simple things – low costs, greater engagement and more creativity in the solutions advisers bring to the table.”

“As a proven innovator in the Australian asset management space, Legg Mason is committed to helping advisors find creative income solutions to share with their clients”, Mr Schiffman concluded. “The results of this survey demonstrate that the appetite is there for new and unique approaches to wealth creation, particularly in regards to retirement.”

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Rachel Staggs

Many Advisers have recently asked me about the topic of client surveys, “How do we?” “Should we?” and so forth. As a passionate believer in client surveys, I was more than keen to put some proven tips on paper (so to speak!).

Mistakes I find many Advisers using are not planning beforehand and then, afterwards not actually doing anything with the findings – massive opportunity!

Below are eight tips to help you when you conduct your client surveys:

1. Plan

Decide on what you want to get out of the survey.  Don’t waste this golden opportunity. If there is something your business is considering introducing, for example, social media or a new service, this is the perfect opportunity to engage with your clients and get their feedback.

2. Who

At some stage every client should be asked their views about your business but perhaps not at every survey. This could be a good time to segment your database and target your client surveys. Remember people are buying you, a service not a product so views can be quite different.

3. What

Don’t go overboard with the number of questions you ask. The aim to get useful information from these surveys not interesting. Perhaps aim for 5 questions but 5 brilliant questions that will give you feedback about your business that you can act on rather than praise yourself for.

4. Simple

Write your questions in simple plain English – nothing too tricky – remembering that time is precious!

5. How

Your next decision is how to conduct these surveys. Typical chooses are 1) Adviser does it – no-one likes confrontation so responses might not be ‘true’ 2) Email survey – can be impersonal so ensure you have the correct client details and the email is addressed to the person 3) outsourced to a third party – best option for ‘true’ views

6. Next

Thank everyone who participated in the surveys. No gifts required just a nice sincere thank you. Feel free to share the common responses (without naming names) to those that took part.

7. Action

If you’ve asked useful questions you’ll receive useful comments that you can use to either grow your business or to make changes to. Make sure this gets done. If clients have participated in a survey and see no change – where’s the value?

8. Finally

Use any data you get back from the surveys in your marketing; your website, social media and so forth – extremely powerful.

Talking to your clients through client surveys, when done properly, can be one of the most effective actions you can take in your business. Surveys for survey sake are a waste of everyone’s time but surveys to engage and find out useful information are GOLD!

 By Rachel Staggs SRS Consulting

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SRS Consulting are hosting  a free webinar to learn more about how you can use client surveys in your Advise business effectively. Click here to register.

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It is the first time since the survey started in 2007 that there has been a divergence in the satisfaction levels of men and women with their financial advisers. 

The latest survey was undertaken in October 2012 by University of Adelaide’s International Centre for Financial Services (ICFS) in conjunction with Lifeplan Funds Management. 

The survey is undertaken every six months and looks at investor attitudes towards their financial advisers. Three main drivers of client satisfaction are measured – perception of trust and reliability of financial advisers; perception of the technical ability of financial advisers; and perception of investment performance. 

Since the last survey in April 2012, the overall index has declined from 71.3 per cent to 70.44 per cent.  The fall was triggered by a drop in the overall perception of advisers’ trust and reliability, which decreased by 6.2 per cent.  Perception of performance declined slightly by 0.07 per cent, while perception of technical ability increased by 3.4 per cent. 

Matt Walsh, head of Lifeplan, said the satisfaction levels of male clients were the main trigger of the fall, cushioned slightly by the improving satisfaction levels of female clients. 

“Across all three drivers, the perceptions of female clients have increased in the latest survey, while male perceptions have dropped significantly. 

“One possible reason for the positive response from female clients could be that women are more attracted to the holistic services increasingly being offered by financial advisers. 

“Another interesting finding of the survey is that women tend to stay with their financial adviser for longer than their male counterparts. 

“This suggests financial advisers may find it worthwhile focussing on building their female client base, as women could be more likely to stay with their adviser over the long-term and gain value from the relationship. 

“However, financial advisers will need to find ways to address the concerns of male clients, who seem to be more critical of their advisers,” Mr Walsh said. 

He added that the decline in the index overall since the last survey is worrying as, based on previous surveys, it should be expected to go up. 

“The index has displayed a steady upwards trend over the last two years, and the April survey in particular showed a dramatic improvement, with the index rising from 67.46 per cent in October 2011 to 71.3 per cent, so a drop back is unexpected. 

“The fall is even more surprising because it has come at the same time that the overall sharemarket is improving. 

“Historically, the index has moved in the same general direction of the ASX200 but for the first time since the survey started in October 2007, it has shifted in the opposite direction. 

“The drop back to a lower level – although still higher than the previous few years – is cause for concern, particularly as there seems to be no single reason behind such a change in client perceptions. 

“The fall can be directly linked to the impact of the marked decline in perceptions of trust and reliability, as the other two drivers either increased, or dropped only slightly,” Mr Walsh said.

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And, very often, these principals operate in relative isolation to their profession. Outside of PD days and industry conferences, they generally have few opportunities to come together to learn from others who are running businesses similar to theirs – to share experiences and discuss pertinent issues with their peers and colleagues.

Consequently, it is difficult for most to know what is loosely termed (and for want of a better description) “best practice”. For example, in a business similar to mine:-

• What is the standard ratio of support staff to advisers?
• What is the average level of practice profitability?
• Is my practice performing better or worse than others in terms of growth/attrition rates over the past 12 months?
• How does my client satisfaction level compare to my peers, not only from within my own dealer but also to “external” firms?
• How often should staff meetings be held?

And so it goes on.

But as agents Mulder and Scully reminded us each week in the X Files – the truth is out there. It’s only a matter of taking time and making the effort to find out. So why don’t more seek out the truth and benchmark their practice?

Stats & Facts

• Those practices which proactively seek regular feedback from their clients in a structured manner are achieving a 74% uplift in profit (compared to those which don’t).
• Practices utilizing an external business adviser are achieving a 94% uplift in profit.

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