Despite the growing need for advice, the financial planning industry has been struggling with consumer confidence and trust, having been embroiled in scandals reaching across a wide range of advisers and licensees.
Adviser Ratings was launched two years ago to help address this issue by bringing to market the kind of independent ratings and review service that has worked well in other industries. In acknowledging the new role of consumer empowerment and the influence reviews have on purchasing decisions, kudos must be given to BT, which launched its own consumer testimonial site, BT’s Adviser View.
Building trust by filling in the gaps
Before Adviser Ratings was launched, consumers were telling us they needed help with their household finances, investments and insurance, but didn’t know whom to go to or what to look for. They felt they were being “marketed to”. So we launched a platform that helped build trust between consumer and adviser, and addressed the information consumers told us they were missing.
To do this, it was important to remain independent, transparent and jargon-free, and to capture all advisers and companies in one place. Most importantly, we realized a personal recommendation is only important with validation from other customers – 92 per cent of consumers now seek out online reviews to validate a personal recommendation (and are willing to change their decision based on those reviews).
Impact to date – the consumer
Since launch, consumer engagement has been positive, and we believe it will help improve both trust in the industry and the quality of advice. Key highlights since inception include:
- Given the volume of reviews and the independence of the platform, Adviser Ratings was verified in December 2016 by Google as a third-party review aggregator. Consumers are now searching for advisers the same way they would when comparing other products, services or professions.
- The platform has gone from about 10,000 searches for advisers per month to 30,000, in two years.
- The platform and the Google-generated search results have now provided thousands of leads to advisers.
- The findings of certain client reviews have resulted in licensees removing three advisers.
Impact to date – the adviser
Adviser Ratings has generally been well-received by the industry. More than 5000 active advisers have claimed their profile. Some advisers have had to reactively join the platform at the request of their own clients.
Many advisers and companies are now embedding the reviews as part of their organisational process, giving them real-time feedback on what they are doing well or not so well, thereby improving client retention. And it is not just the domain of non-aligned licensees; companies aligned with Garvan, Bridges, AMP, Financial Wisdom and Charter all build it into their client acquisition and retention strategies.
The platform is also being used as a compliance tool. Following the launch of the paid licensee portal late last year, more than a dozen licensees are now using data and insights.
Adviser Ratings’ future with the industry
Adviser Ratings will become an important part of an adviser’s ability to win and retain clients and a key to a firm’s valuation at sale time. Just as business brokers place importance on customer review sites in other industries, firms will need to factor this in as a selling point for potential buyers as well.
The platform is evolving in ways that will continue to enable advisers to bridge trust with clients and potential clients, and assist in bringing higher-quality advice to the market:
- Smarter matching algorithms and scaled advice technology, ensuring higher quality leads and increased revenue for advisers
- Increasing confidence for consumers by verifying the credentials of advisers
- Better financial consumer literacy tools and adviser professional development services
- Ability for growing advice firms to attract new advisers or staff through a jobs board that already has 4000 registered participants in beta
- Partnerships with other large consumer databases (through either white-labelled or referral partnerships), such as the recently announced Small Business First partnership, bringing clients from small to medium-sized businesses to advisers
- Ratings and reviews of the available robo-advice products, so advisers and consumers can help determine what’s best for them and their clients
- Partnerships with technology and product providers that will help advice firms and advisers run their businesses more effectively.
Advisers and licensees will continue to see increases in compliance and regulatory operating costs. As human, face-to-face advice becomes more important, it’s essential that savings are found through acquisition and operational efficiencies. Adviser Ratings will look to play an important role in providing these for advisers, as we aim to become the marketplace Australians visit to find and connect with a financial adviser.
Angus Woods is the managing director of Adviser Ratings.
