Email still king but fees hold the aces for clients

The ability to communicate with clients remains a key differentiator for financial planners, but fee structuring is the discussion advisers should really be having.

The 2011 Client Engagement Behaviour Survey Report on financial services, which generated over 400 responses from people who had recently used the services of a financial planner, found 75 per cent of respondents would prefer an alternate way of paying fees to that of the current industry standard.

Of these, 33 per cent said they would prefer a form of ‘success fee’ based on performance and taxation savings.

29 per cent preferred a flat fee and 13 per cent an hourly rate.

Aside from fee structure, this suggests advisers still have much to do in articulating their value proposition to clients so they no longer see the role of the financial planner as being one of solely managing money and saving tax.

“The survey results reveal that in excess of 90 per cent of respondents present a different, and in most cases, the opposite DISC behavioural style to the majority of Australian financial planners – so, we have a significant disconnect in styles and approach which can lead to less than effective client relationships if not acknowledged and managed effectively,” the research concluded.

43 per cent nominated personal email as the preferred communication method of their planners, but only 37 per cent said this was their ideal communication method.

Call me – preferred

However the greatest mismatch between adviser communication and client expectation remains the telephone, with just 11 per cent nominating this as the most common way their financial planner keeps in touch.

24 per cent of those surveyed said telephone was the communication method they would prefer, the same percentage as those who nominated face-to-face meetings as their preference.

Email newsletters, websites and social media collectively recorded just over 10 per cent as preferred communication methods.

“To explore the social media component of the survey further, respondents were asked which was their preferred method of contact between themselves and their financial planner, institution or supplier,” explains Keith Wright, chief executive officer of organisational consultancy, Leap of Faith, a survey contributor.

Respondents were asked to select their top three preferences, with one-on-one email by far the most desired method of communication, followed by telephone then face-to face-meetings.

As a group, only 22.9 per cent of respondents listed an email newsletter as being amongst their top three preferred methods of contact.

“One issue that became clear was a desire by clients to have more face-to-face meetings. This is something I now know I will need to address and work into my cost structure and service levels,” says Anna-Louise Brown of Wealth Build, an authorised representative of the Madison Financial Group.

It is also worth noting that, while the survey was sent to current and known clients of financial planners, only 62 per cent of respondents responded with ‘Yes, I have a financial planner’ when asked if they primarily use the services of a financial planner or a financial services institution.

The question has to be asked what the other 38 per cent of respondents think financial planners do for them.

However, there was good news on Future of Financial Advice (FoFA) compliance, with the survey not reflecting the alarm expressed by sectors of the industry around annual fee disclosure requirements.

The research found that 83 per cent of clients are already meeting with their planner by telephone at least once every 12 months to discuss fees.