Annual Reviews Key to Client Retention and New Referrals – New Research

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Financial advisers looking to boost client retention and new client referrals should prioritise annual reviews, according to a report from insurer MetLife Australia.

The insurer says in a statement that its MetLife Adviser-Client Relationship Report found that of the 60 percent of consumers with life insurance who undertook a review with their adviser in the last 12 months, 63 percent rated their experience as ‘very good’ or ‘excellent’ and 49 percent modified their insurance cover in line with their stage of life.

Similarly, for SMEs (63 percent) which underwent a review with their financial adviser in the past 12 months, 55 percent opted to make a change to their policy, with 49 percent making the decision to increase their cover.

MetLife says the added value of this engagement with clients is clear as consumers who had a review were also more likely to be loyal and recommend their adviser to a third party.

It notes that measures to support client longevity and positive word-of-mouth are especially important at a time many consumers (30 percent) and SMEs (50 percent) are considering changing their adviser or ceasing to use one completely, due to reasons such as high fees, commissions, lack of trust and perceptions of value.

“Annual reviews and regular contact provide advisers with the opportunity to develop open and trusting relationships with their clients and to ensure they are properly educated on the value of financial advice tailored to individuals’ needs and circumstances,” it says.

MetLife’s Jeff Scott …it’s critical that advisers put the right measures in place to get to the heart of clients’ concerns.

Jeff Scott, MetLife Australia Head of Advice Strategy, says that the recent spotlight on the financial services industry has caused clients to take a more active interest in the financial products and services they hold and question the value they’re getting from these relationships.

“Where clients don’t see value from their adviser, we’re seeing clients looking to either shop around or to stop seeing one entirely, meaning it’s critical that advisers put the right measures in place to get to the heart of clients’ concerns.

“From this year’s research we know one of the most effective ways to do this is by conducting annual reviews, as they create an open forum for clients and advisers to engage in transparent two-way communication.”

He says the payoff is clear, with clients who undertake annual reviews tending to be more satisfied, loyal and likely to go on and recommend their adviser to a third party.

…If there’s a key takeaway from this research it should be that there is no such thing as a ‘set and forget’ client any more…

“If there’s a key takeaway from this research it should be that there is no such thing as a ‘set and forget’ client any more. Client engagement should be the number one priority on every adviser’s business plan for 2020,” Scott says.

Now in its second year, the company says the MetLife Adviser-Client Relationship Report 2019 is the largest quantitative study of its kind. It notes the report includes insights from consumers and SMEs with up to 20 employees who have life insurance purchased through a financial adviser and consumers who are very likely to see a financial adviser about life insurance in the next two years.