Client confidence in planners increasing
Clients of financial planners are investing more of their assets according to their planner’s recommendations, with 88 per cent rating the overall quality of the service they receive as good or very good, according to a new Investment Trends report commissioned by Credit Suisse Asset Management (CSAM).
The research is based on the responses of over 600 clients of eight dealer groups, and shows that the average client invests 70 per cent of their portfolio according to their adviser’s recommendations — up from 64 per cent in 2004.
Trust continues to be the most important factor in planner selection, followed by an understanding of the individual’s goals and a good reputation.
Pricing is seen as the most important attribute by less than 10 per cent of individuals.
The research also found that over 70 per cent of consumers who switched super funds following the introduction of choice did so in response to their planner’s recommendation.
CSAM’s head of retail Chris Larsen said that, typically, advisers have been reluctant to offer advice relating to super switching. “But if they want to get into this business, the thing that shouldn’t frighten them off is that their clients are going to have this notional desire to stay with an industry super fund.
“Because clients are saying it’s not about returns, it’s not about fees, it’s more about the fact that I trust my financial planner and I’m prepared to go with their recommendations.”
Retirement income needs are also changing, according to the analysis. The survey found that 70 per cent of respondents felt it was more important to have a good lifestyle, with only 12 per cent wishing to preserve their wealth for future generations.
According to Larsen, this could lead to a huge uptake in reverse mortgage type products.
Larsen said: “It’s not for us to have a view on it, but quite honestly if the products are structured right we think they are probably good investments for a lot of people . . . and when it plays out, that will be a massive boon for the financial services industry, because if that money comes out of a home it could go into super, or an allocated pension.”
Recommended for you
Insignia Financial has reported a statutory net loss after tax of $17 million in its first half results, although the firm has noted cost optimisation means this is an improvement from a $50 million loss last year.
With alternative funds being described as “impossible” for fund managers to target towards advisers without the support of BDMs for education, Money Management explores the evolving nature of the distribution role.
Former financial adviser Bradley Grimm has lost his appeal to have his sentence overturned in the Supreme Court of Victoria after judges ruled the conditions were “lenient” for his actions.
Following ASIC’s report into AFSLs’ adoption of AI last year, two DASH executives have urged financial advice practices to consider AI within their risk governance frameworks or risk regulatory scrutiny.
