Clients are increasingly pleased with the technical ability and trust the reliability of their financial advisers, according to the latest Lifeplan ICFS Financial Advice Satisfaction Index.
The research was undertaken in late April and early May by the University of Adelaide’s International Centre for Financial Services (ICFS).
The results suggest a significant improvement in client perceptions of advisers, both in terms of trust and technical ability, despite the stagnant performance of the share market.
The survey is undertaken every six months by Lifeplan Funds Management with the ICFS, looking at investor attitudes towards their advisers.
A total of 416 investors were polled.
There are three main drivers that the survey tests: perception of trust and reliability of advisers; perception of the technical ability of advisers; and perception of investment performance.
All three drivers improved since the last survey in October 2011 and the index now sits at 71.3, its highest point since October 2008.
Perception of trust and reliability and perception of technical ability increased 4.3 per cent and 5.9 per cent, respectively, since the last survey.
Matt Walsh, head of Lifeplan, said there has always been a relatively high correlation between share market movements and perceptions of investment performance by clients, but the same does not apply to perceptions of technical ability or trust and reliability.
“The dramatic increase in perceptions of trust and reliability and technical ability, at a time when the ASX 200 was doing very little, suggests that advisers have made good progress in helping clients understand the true benefit that they can provide,” he says.
Returns not everything
“The rise in perception levels shows return on investment is not the only, or even the main, criteria clients hold their advisers to, but that technical areas such as tax advice, estate planning or structuring of finances are highly valued by clients.
“Advisers tread the fine line between encouraging clients to invest for long-term benefit, and managing their short-to-medium-term fears of market volatility. This survey shows that whatever advisers are doing is being recognised by their clients in a positive way.”
The survey found that those who have been with an adviser longest were most satisfied.
“Consistent with previous surveys, those who have only been receiving financial advice for a short time – less than five years – are the least satisfied with financial advice,” says Walsh.
“This continues to be an area of concern for advisers, as this group would include younger clients who will form the basis of their business in the future.
“It’s understandable that this group, who have only had an adviser during the worst of the global financial crisis, are disillusioned by financial markets and investments, but it’s important advisers don’t give up on educating them on the full range of financial planning options available to them.”
Andrew McLachlan, director of the ICFS, said the survey continues to highlight the importance of financial advice for Australians.
“One element that has been consistent in the surveys over the past few years is that people who have had an adviser for a significant period of time, recognise the value of that advice,” he says.
“This hasn’t changed in the post global financial crisis environment, and is something advisers can take heart from.”
