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Client satisfaction with their financial adviser has declined over the last six months, largely driven by falling satisfaction among male clients, according to the latest Lifeplan ICFS Financial Advice Satisfaction Index.

Client satisfaction with their financial adviser has declined over the last six months, largely driven by falling satisfaction among male clients, according to the latest Lifeplan ICFS Financial Advice Satisfaction Index.

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 are 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.

Lifeplan Funds Management is a specialist business of Australian Unity Investments (AUI), with total funds under management and administration of $1.54 billion (as at 31 October 2012).  It is a market leader in investment and funeral bonds, and a leading provider of education investment funds. 

The International Centre for Financial Services is a centre of excellence and thought leadership in financial services, based at the University of Adelaide.  Its mission is to foster excellence in the financial services industry through world class research and education as well as through industry collaboration and engagement. For more information, click here.

Matt Walsh, head of Lifeplan, became chair of the ICFS Advisory Board in 2010.

* The Lifeplan/University of Adelaide’s International Centre for Financial Services (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 latest survey of 406 investors who use financial advisers was undertaken in October 2012, and sought feedback about the performance, trust and reliability, and technical ability of their financial adviser.  Surveys also look at the different satisfaction levels of clients according to gender, age and wealth levels.  Past surveys can be accessed here.



For more information please contact:

Matt Walsh – Phone: 08 8236 4706

15 November 2012