The Client – Clients: what do they think of us now?

Industry research tells us that more and more people are turning to financial planners — but what do clients really think of their advisers? David Chaplin investigates.

The Roy Morgan Research survey conducted on behalf of the Financial Planning Association (FPA) and released in April this year, claims that over 50 per cent of Australians have at some time sought financial advice.

The figure, which equates to close to eight million people, represents a huge potential client base for the financial advisory industry.

The survey broke down the figures further with financial advisers/planners, at 36.1 per cent, topping the list of who was approached for advice - meaning close to three million Australians have at some time seen a planner.

It is still an impressive number and the research can refine that raw data even further so that we know the typical client of a financial planner is married, a high income earner and aged over 50.

While the statistics are interesting, and perhaps encouraging for the industry, they do little more than paint a bare-bones picture of a theoretical client; an illusory figure that can be marketed to in a focused way based on his or her magazine of preference.

But no client, unfortunately for the marketing industry, will fit the model perfectly. Clients tend to be uncompromisingly human, with diverse views and habits.

Planners and others giving financial advice are dealing each day with this diversity and are probably aware of some of the thoughts that flow through their clients' minds.

However, are clients necessarily letting on how they really feel about the service they're getting and the value of the financial advice industry in general?

One obvious way to gauge client perception is to examine complaints made to the various official bodies about financial advisers.

However, the Financial Planning Association (FPA), admits that a detailed compilation and analysis of all client complaints has yet to be carried out.

FPA public affairs manager, Katrina Byers, says the organisation is in the process of doing just that.

"We only recently commenced the introduction of a sophisticated complaints database which tracks complaints and identifies systemic problems and trends," Byers says.

"Unfortunately previous data was very thin. This is now being addressed but it's too early to give any insightful and meaningful data."

Once the complaints database is up to speed it should be relatively easy to pinpoint what planners are doing wrong but what about the things they're doing right?

Understanding what the client of the future expects from their financial planner could be a major step towards securing a place for planners in an increasingly competitive market.

Byers says as clients become more educated and demanding financial planners will be under a lot more pressure to show their value.

"There's a big debate on at the moment amongst planners about how to get clients through the door and we need to gather data and identify trends to help understand client expectations," she says.

As part of this information-gathering the FPA is currently embarked on another survey, studying investor perceptions of financial planning.

The survey has targeted investors over 35 years with more than $100,000 invested and includes those who use a planner and others who don't.

"It's a bit early to say anything conclusive but early anecdotal evidence suggests that there is a difference between those who have been to a planner and those who haven't," Byers says.

She says those who use or have used a planner appear to have a much more positive view of financial planners but not necessarily of the whole industry.

"It's the same as people who say 'I don't like lawyers' but they like their own lawyer."

The concept would apply just as well to accountants.

As many accountancy firms push aggressively into the financial planning arena the need for this industry to identify clients' expectations has also grown.

Kathy Streeter, the financial planning industry adviser to the Australian Society of Certified Practicing Accountants (ASCPA), says the organisation has launched a comprehensive survey of high net worth clients.

"The survey is looking at the difference between what planners think their clients want and what the clients actually think they want from financial planning," Streeter says.

While the survey is in its early stages Streeter says she expects there will be a difference between the views of planners and clients.

"I expect clients will be looking for personal attributes from their financial planners and not necessarily technical ability," Streeter says.

"Clients probably want to be able to trust their planner more than anything, and accountants have an advantage in that most clients already trust them. Many people go to their accountant as the first source of financial advice and we want to maximise that."

She says most financial advisers are probably already aware that once they have a client's trust then "they're home and hosed" but this is also a cause for concern as clients may be trusting unqualified people.