New research from Zurich has revealed adviser sentiment is at its lowest level in two and a half years.
The Zurich Risk Adviser Sentiment Index, compiled for the insurer by Beaton Research and Consulting, tracks adviser sentiment across five key indicators, including regulatory environment, long term business viability and consumer demand. The latest results, taken in December 2014, expose a sharp fall in confidence, headlined by a negative assessment of the regulatory environment, down 14% on the previous year.
Advisers were also worried about the long term viability of their practices (down 11.6% year on year) and the short term sales outlook (down 10.1%).
“Advisers found 2014 to be very challenging from a reputational perspective, especially in the wake of the ASIC Report and the negative tone of the subsequent dialogue,” said Zurich’s General Manager Retail Life and Investments, Philip Kewin.
“Our research shows this hasn’t just impacted adviser mood, it has also flowed through to bottom lines; nearly one third of advisers indicated the negative publicity had led to a drop in revenues for their businesses.
“Worryingly, one in ten of those surveyed believe their revenues have dropped by 10% or more, purely as a result of the reputational damage the advice profession endured last year,” he said.
The events of the last year have driven a wedge between consumers and advisers
Mr Kewin noted that while the ASIC report did identify challenges for the industry in the way advice is remunerated, most people have overlooked that the regulator was in fact very pro-advice, and supportive of the role advisers play in insuring more Australians.
“The events of the last year have driven a wedge between consumers and advisers, yet it’s clear that the advice industry plays a vital role in helping people protect and build their wealth and in lifting the level of financial literacy throughout the community.
“Rebuilding trust within the profession won’t be achieved by changing remuneration alone; it requires improving the overall customer experience, through the convenience and efficiency benefits of technology, through more emotionally intelligent advisers and through a greater appreciation of the benefits quality advice can bring,” he said.
