A clear edge in “people skills” has seen Ipac Securities named the CoreData Advisory Group of the Year for 2011.
Ipac put an end to Apogee Financial Planning’s two-year winning streak and improved on the Highly Commended it received in 2008 and 2010.
The Advisory Group of the Year title was first awarded in 2005.
In encouraging news for the industry, CoreData’s 2011 Financial Planning Shadow Shop also revealed a continuing post-GFC recovery, evidenced by an improvement in the intention of potential clients to take up advice.
“The GFC had a negative impact on consumer perceptions of the value a financial adviser can bring to the table, with the critical ‘intention’ category of the ACQUIRE Index – a measure of customer commitment to proceed with, choose and recommend a financial adviser – falling steadily between 2006 and 2009,” sais CoreData in a statement, adding that it considers this to be the single most critical measure in the index of whether an adviser has successfully acquired a new client.
However, 2011 saw some steady improvement.
While the research found that “intention” remains neutral, hovering in the 50s, the trend over recent years has been positive, suggesting consumers are regaining trust in advisers and the value of advice.
Ipac Securities took out the intention category and, overall, came up trumps in seven of the benchmark categories that make up the ACQUIRE Index assessment: assurances, compliance, quality, understanding, intention, reaction and environment.
The research aims to award the licensee with the strongest ability to acquire prospective clients, based on the ratings of consumers who went to see an adviser with the intention of taking up financial advice.
The report again underlined the importance of “people skills” in the advice process.
The number one expectation potential clients have from their adviser is honesty and transparency, highlighted by 70.5 per cent of would-be clients.
A large number of cancellations last year due to lengthy waiting periods and lack of responsiveness to requests for meetings was largely resolved in 2011, with the number of dropouts due to reasons in the advisers’ control reducing to just 8 per cent, from 30 per cent in 2010.
Despite these encouraging signs, the overall experience of potential clients (based on the ACQUIRE roll up score) has remained static year-on-year, at 70.1 in 2011 compared to 70.2 last year.
Ipac’s national head of partnership and advice strategy, Deborah Potts, said the award was recognition for the work put in by the group to improve the client engagement process.
She added that the ACQUIRE categories were a “good mix of advice quality and compliance”.
Potts says Ipac worked with advisers individually as part of a detailed one-on-one program to improve their engagement with clients.
She said feedback on new tools like client cards and a family tree exercise, to ascertain which family members are important, had been positive.
“It’s encouraging that the intention of potential clients to take up advice continues to improve post-GFC,” says CoreData’s head of advice, wealth and superannuation, Kristen Turnbull.
“For many years advisers have struggled to decouple investment returns from the value of advice in the mind of the consumer. The fact that intention has increased over the last two years despite continued market uncertainty suggests that people are regaining their trust in advice.
“However the industry still has some way to go. Overall intention in 2011 remains neutral, with the results suggesting that most potential clients lack the impetus necessary to engage an adviser. Ideally advisers should be converting all those who walk through their door looking for advice into clients.
“The proliferation of scoped or scaled advice may serve as a driver for increasing customer acquisition effectiveness, giving people the option of receiving their advice in a piece-by-piece manner and allowing advisers to scale down the costs and accessibility for consumers.”
The CoreData Financial Planning Shadow Shop research compared the process customers go through when seeking a financial adviser to introduce a realistic measure of adviser client acquisition effectiveness.
CoreData followed the entire customer experience of 349 separate “mystery shopper” events across 18 of the industry’s major dealer groups from August through to November, 2011.
Macquarie Wealth Management and AXA Financial Planning were Highly Commended whilst Apogee Financial Planning and MLC FP/Garvan FP were Commended.
