Satisfaction with advisers shows strong improvement: Lifeplan

Strategies needed to manage sequencing risk for investors: Wingate
June 13, 2012
Avenue firm unveils new name
July 7, 2012

Clients are increasingly pleased with the technical ability and trust and reliability of their financial adviser, according to the latest Lifeplan ICFS Financial Advice Satisfaction Index.

Clients are increasingly pleased with the technical ability and trust and reliability of their financial adviser, according to the latest Lifeplan ICFS Financial Advice Satisfaction Index.

The research was undertaken in late April and early May 2012 by University of Adelaide’s International Centre for Financial Services (ICFS).  It shows a significant improvement in client perceptions of trust and reliability of advisers, and their technical ability, despite the stagnant performance of the sharemarket.

The survey* is undertaken every six months by Lifeplan Funds Management with the ICFS, looking at investor attitudes towards their advisers. There are three main drivers that the survey tests – perception of trust and reliability of advisers; perception of the technical ability of advisers; and perception of investment performance.

Overall, all three drivers improved since the last survey in October 2011, and the index now sits at 71.3, its highest point since October 2008.   Perception of trust and reliability and perception of technical ability increased 4.3 per cent and 5.9 per cent respectively since the last survey.

Matt Walsh, head of Lifeplan, said there has always been a relatively high correlation between sharemarket movements and perceptions of investment performance by clients, but the same does not apply to perceptions of technical ability or trust and reliability.

“The dramatic increase in perceptions of trust and reliability and technical ability, at a time when the ASX 200 was doing very little, suggests that advisers have made good progress in helping clients understand the true benefit that they can provide.

“The rise in perception levels shows return on investment is not the only, or even the main, criteria clients hold their advisers to, but that technical areas such as tax advice, estate planning or structuring of finances are highly valued by clients.

“Advisers tread the fine line between encouraging clients to invest for long-term benefit, and managing their short to medium term fears of market volatility. This survey shows that whatever advisers are doing is being recognised by their clients in a positive way,” Mr Walsh said.

The survey also showed that those who have been with an adviser longest were most satisfied.

“Consistent with previous surveys, those who have only been receiving financial advice for a short time – less than five years – are the least satisfied with financial advice.

“This continues to be an area of concern for advisers, as this group would include younger clients who will form the basis of their business in the future.

“It’s understandable that this group, who have only had an adviser during the worst of the global financial crisis, are disillusioned by financial markets and investments, but it’s important advisers don’t give up on educating them on the full range of financial planning options available to them.

“The survey clearly shows the longer people have an adviser, the more likely they are to have high perceptions of their trust and reliability and technical ability, because they have experienced the benefit of long-term strategies as well as the full range of financial advice.

“There is an opportunity for advisers to improve the transfer of this understanding, through education and communication, to newer clients,” Mr Walsh said.

Andrew McLachlan, director of the ICFS, said the survey continues to highlight the importance of financial advice for Australians.

“One element that has been consistent in the surveys over the past few years is that people who have had an adviser for a significant period of time, recognise the value of that advice.

“This hasn’t changed in the post global financial crisis environment, and is something advisers can take heart from,” Mr McLachlan said.

Lifeplan Funds Management is a specialist business of Australian Unity Investments (AUI), with total funds under management and administration of $2 billion (as at 31 March 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 visit www.adelaide.edu.au/icfs

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 416 investors who use financial advisers was undertaken in April and May 2012, and sought feedback about the performance, trust and reliability, and technical ability of their financial adviser.  Past surveys can be accessed at www.lifeplan.com.au.

 

 -oOo-

For more information please contact:

Matt Walsh – Phone: 08 8236 4706

18 June 2012