Two research papers released during the last week are indicating that fewer consumers are seeking advice from financial advisers, partly due to what they see as a lack of value in the process. Our latest poll is asking you to consider how you believe your clients currently assess the value you provide them:
What proportion of your clients perceive they are gaining value for the fees and/or commissions they pay you?
Amongst its key findings, CoreData’s 2012 Financial Planning Shadow Shop revealed there was a marginal decline in the ability of financial planners to acquire new customers last year, where almost 52% of respondents cited ‘value for money’ as an issue.
Another key finding from this research was that ‘ability to enthuse’ is no longer the most highly correlated factor with customer commitment to proceed to take-up advice. This has been overtaken by ‘value of the planner’s services’.
Hot on the heels of the CoreData Shadow Shop findings, REST Super has released research that reveals the majority of Baby Boomers have not sought financial advice to help them prepare for retirement. Taken from our report (Baby Boomers Unprepared for Retirement…):
… nearly 20% said they did not trust financial advisers, and a similar percentage said they believed financial advice was too expensive.
The main reason respondents gave for not seeking professional advice was because they handled their own financial affairs, or saw no need for the service. But nearly 20% said they did not trust financial advisers, and a similar percentage said they believed financial advice was too expensive.
Is your financial advice ‘too expensive’? Or does your financial advice proposition deliver excellent value, but is perceived by your clients and potential clients to be too expensive?
Then, there is the question of whether you receive your remuneration mostly via commissions or fees. A fee-based advice proposition is generally more transparent than a traditional commission model. Is there a possible link between more advisers charging fees and the increasing importance of the issue of ‘value’ in the mind of the consumer?
These research findings pose a lot of questions. Where are you positioned with your own clients? Do they all perceive that you are delivering value? Or do you have a challenge before you, to perhaps adjust your proposition and/or how you communicate it, in order that your clients can see the true worth of your services – your true ‘value’?
As always, tell us what you think…
The emphasis on client perception of adviser value is long overdue and good to see. However the sad industry fact is that very few advisers would truthfully be able to answer this poll as they don’t in reality ask this question of their clients. (The reason we know this is that there are plenty of firms conducting surveys of advisers about whether they are conducting client surveys!) Surveys of financial advice clients by advice practices (not banks) are still not the norm, despite so many organisations offering, variously, the stats to support the value of client surveys for business strength and growth and/or help with the construction, conducting and analysis of those client surveys. (A disclaimer – the risk store isn’t one of those so this isn’t a plug!)
Is the non-surveying advisers’ axiom therefore: “They are not complaining therefore they see that I am worth it. Therefore it must be 100%”. Your results will be interesting. Well asked.
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