The latest adviser research from CoreData reveals that close to three in ten Australians who receive financial advice are contemplating leaving their adviser.
This presents a dual opportunity for Australian advisers: first, to identify and keep those clients who may be in danger of leaving; and second, to promote themselves to dissatisfied clients of other advisers and simply steal their business.
The research breaks up Australian financial planning clients into three core groups: “bonded” – those who will never leave their adviser; “loose” – those who might consider leaving their adviser; and “at risk” – those who actively want to leave their adviser.
Better retention
Increasing contact leads to better retention. Frequency of contact of any kind, and meetings in person with financial advisers, are clearly linked to maintaining relationships with clients. Some 65.8 per cent of those classed as “bonded” have met with their adviser in the past six months, while 90.5 per cent have been contacted by their adviser within that timeframe.
In contrast, 58.3 per cent of respondents classed as “at risk” last met with their adviser more than 12 months ago, while 33.3 per cent have not received any contact from their adviser for more than 12 months.
Like and trust
Clients want advisers they like and trust. The core drivers of churning in financial services boil down to client intimacy and trustworthiness, with 44.4 per cent of clients with “at risk” profiles and 33.0 per cent of those with “loose” profiles stating that seeking an adviser they can trust is the core driver for switching.
The other driver is client intimacy, with close to two in five “at risk” respondents (38.9 per cent) and 22.3 per cent of “loose” respondents stating they would switch in order to have an adviser who they dealt with personally.
Huge opportunity
The unadvised opportunity is huge for advisers. While the attraction of simply getting financial-advice-ready clients from existing planners is exciting to some planners, the real opportunity exists in the unadvised marketplace.
Two in three “mass affluent” Australians aged over 18 do not currently have a relationship with an adviser; and of these, close to half intend to enter the market for financial advice. These Australians represent a tremendous opportunity for advisers.
The opportunity for financial advisers to target this market appears to be largely untapped, with more than 49 per cent of the marketplace stating that they would welcome the opportunity to speak with a financial planner who they felt they could trust. And the top things that they are looking for, in order, are: help setting their financial goals; expert advice on investment strategy; and tax areas where advisers already have expertise.
