Financial planners need to show their expertise to their clients through regular contact and reviews to retain clients and improve client satisfaction.
MetLife’s latest report, Understanding the Adviser-Client Relationship, reveals that a quarter of respondents are considering changing their adviser or ceasing the relationship due to high fees or commissions.
This was followed by 23 per cent of respondents no longer needing advice and 23 per cent citing poor communication.
Richard Nunn, chief executive of MetLife Australia says: “This is a concerning statistic which highlights how important it is for advisers to demonstrate the ongoing value of the service they provide. Advisers can’t take their clients for granted.”
In order to counteract this, advisers are encouraged to build a relationship that is more akin to a partnership and by demonstrating their expertise and providing value on a regular basis.
The report reveals that clients who have had a review in the last 12 months are 2.1 times more likely to be loyal and recommend their adviser to a third party.
For consumers who are considering financial advice, the most important factors when choosing an adviser continue to be honesty and trustworthiness, transparency about fees and commissions and adviser experience.
Matt Lippiatt, MetLife Australia’s head of adviser experience says: “If there’s a key takeaway from this research it should be that there is no such thing as a ‘set and forget’ client anymore. Client engagement should be the number one priority on every adviser’s business plan for 2020.”
Of consumers who do have an adviser, around 55 per cent are not aware of the amount of commission that their adviser receives.
Despite this, when asked if removing commissions would make consumers more or less willing to see their adviser, nearly half indicated they would not expect the removal of commissions to change their willingness to see an adviser.
MetLife says the data suggests the issue is not with an adviser receiving commissions, but that the lack of transparency in receiving commissions.
Lippiatt says: “Our industry has traditionally operated on a commission-for-advice model which has proved to be a highly effective charging method, however it’s clear from the research that customers are looking for options when it comes to how they pay for their financial advice.”