Client satisfaction up but question advisers technical ability: Lifeplan

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The ongoing noise about changes to financial services’ regulatory requirements appears to be affecting attitudes towards financial advisers.

The latest Lifeplan ICFS Financial Advice Satisfaction Index* has shown clients of financial advisers have become significantly less happy with the technical ability of their adviser over the past six months.

The latest in a series of surveys of financial advisers’ clients, undertaken in April, sought feedback about the performance; trust and reliability; and technical ability of their financial adviser.

Since the previous survey in October 2012, perceptions of financial advisers’ technical ability have dropped by 4 per cent, while the other two drivers – performance, and trust and reliability ­– have both improved, up 11.6 per cent and 5 per cent respectively.  The strong perceptions of performance helped pull the overall Index up by 3.1 per cent.

Matt Walsh, head of Lifeplan, said one of the most likely reasons for the drop in perceived technical ability is the ongoing regulatory change affecting the financial planning sector, and overall loss of confidence in, and confusion about, the changes being made.

“Clients have been exposed to the significant changes taking place in financial planning, such as the impact of FOFA requirements including fee-for-service, which can easily be misinterpreted as critical of financial planners.

“There are two probable causes.  Firstly, clients could well be thinking ‘there must be an issue if the government is creating regulation to fix it’.

“Secondly, the effort of responding to the changes has distracted advisers from the very thing they’d prefer to be doing – working with their clients and giving quality advice.”

Mr Walsh said many clients could still be unfairly blaming their adviser because they have missed out on recent market gains or waited too long.

“The movements in the Lifeplan Index over time indicate client communication is a critical aspect of the relationship.

“There needs to be more individual contact to give advisers the opportunity to explain how they are dealing with the many issues around, and show they have the skills and knowledge to manage them.

“Education and information programs for clients will also enhance relationships and show the adviser has the technical knowledge required, and also helps reinforce the image of trust,” Mr Walsh said.

He pointed out that those who have had an adviser for only a short time are more likely to have a positive perception of their adviser’s technical ability than those who have had an adviser for a significant period of time.

“This is probably because advisers have spent more time with new clients than those they have had for some time.

“The perception of technical ability among those who have only had an adviser for two years or less has improved since the last survey, and it is those who have had an adviser for 10 years or more who have displayed a decline in their perception of their advisers’ technical ability.

“It would make sense for advisers to consider ways to remove themselves from the ongoing noise and distraction around legislation and market movements, and ensure they are maintaining a healthy range of advice strategies that are not dependent on market performance or superannuation alone, with a focus on communicating this to clients,” Mr Walsh said.

Lifeplan Funds Management is a specialist business of Australian Unity Investments.  It is a market leader in investment and funeral bonds, including education investment funds. 

*The Lifeplan ICFS Financial Advice Satisfaction Index is based on academic research that models the factors that explain a client’s willingness to recommend their financial adviser to a friend or acquaintance. The research also analyses how investors’ age, levels of investment and length of their relationship with their adviser impacts these attributes.  It is sponsored by Lifeplan Funds Management and conducted every six months by the University of Adelaide’s International Centre for Financial Services. For more information visit The survey of 400 investors who use financial advisers was undertaken in April by the University of Adelaide’s International Centre for Financial Services (ICFS) for Lifeplan, and sought feedback about the performance, trust and reliability, and technical ability of their financial adviser. Past surveys can be accessed at


For more information please contact:

Matt Walsh – Phone: 08 8236 4706

1 April 2013