The lead up to and arrival of the Future of Financial Advice (FoFA) reforms have thoroughly tested the relationship between financial planners and their licenses with Charter Financial Planning weathering the regulatory change better than most.
The AMP-owned licensee has today taken out research house CoreData’s licensee of the year award for 2013, which measures adviser satisfaction with their licensees.
According to Salvador Saiz, head of advice wealth and super at CoreData, the impending reforms saw a new appreciation by advisers for licensee support services such as remuneration, compliance support and technical services.
“In the past, importance rankings for advisers have tended to centre around the price/service trade off – with the utility which can be derived from their licensee relationship coming down to how much advisers are able to earn from a service as compared to the amount of work they had to do to achieve the outcome,” Saiz told Professional Planner.
“That’s now changed markedly and instead what we are increasingly seeing is advisers being attracted by businesses which are delivering great compliance support and have the systems and training programs to take the stress from advisers.”
Illustrated trends
This trend is best illustrated by the research finding that compliance support is the most utilised licensee support service by respondents across the industry, with nine in 10 respondents using it in the past 12 months.
This was followed by education and training (82.2 per cent) and technical services (82.1 per cent). All three have experienced a surge in usage over the past three years. Additionally, compliance support has been rated as the most important licensee attribute at an industry level in 2013, ahead of remuneration, which was rated second.
Charter Financial Planning was the overall winner after adviser satisfaction across 10 core categories and underlying metrics were tallied up CoreData.
The dealer group received an overall weighted satisfaction score of 7.42 out of 10. This follows a fourth placing in 2012, with a score of 6.88.
Newly established Fortnum Financial Advisers was the runner up with a score of 7.05, ahead of Commonwealth Financial Planning, which was placed third for the second successive year.
Satisfaction with licensees
When advisers were asked to rate their overall satisfaction with their licensee, Fortnum received the highest level of satisfaction, with an average score of 8.3 out of 10. Fortnum was followed in this category by Financial Wisdom (7.6) and Count Financial (7.2). They all outperformed the industry average of 6.7.
Fortnum advisers are also the most likely to recommend their licensee to other advisers, with an average intention to recommend score of 9.2 out of 10. They were followed by Charter (7.5) and Financial Wisdom (7.4). This compares to an industry average of 7.0.
The research also found that more than half of all advisers in the industry have been approached by one or more licensees in the last 12 months asking them to jump ship.
However, there is little appetite for switching with those intending to change in the next 12 months relatively stable at 14.4 per cent of advisers polled.
The Licensee Research Report analysis and findings are based on quantitative and qualitative data collected via an online survey in March and April of 2013, completed by 876 advisers, practice principals, risk specialists and paraplanners.
