Clients dissatisfied with advisers

Clients have become dissatisfied with their long-term advisers in the past year due to bad investment advice and have grown less likely to recommend them to their associates, according to research by ING Australia.

The research found that those who were highly likely to recommend their advisers, and had worked with their adviser for five years or more, had fallen from 46 per cent to 35 per cent, a significant drop in the past year. Those who had been with one adviser for two to five years were 5 per cent less ‘highly likely’ to recommend their advisers.

The long-term relationship between advisers and clients is a key reason for clients recommending advisers, especially if the relationship has lasted between two to five years, or more.

Ross Barnwell, ING executive director of sales and marketing, attributed the decline to advisers not paying attention to adviser — client relationships when the market was volatile.

“Client satisfaction is off the highs of 2007… the fundamentals of what clients want have changed.

“In 2008, clients expect their adviser to clearly understand their financial goals. You would assume this is a given, but clients now expect a stronger focus on this aspect of advice than in previous years. This year clients are less impressed with their adviser’s track record for recommending good investments and want the adviser to take clear responsibility for their actions.”

Barnwell emphasised that a good client relationship was about regular contact, a complete understanding of clients’ needs and reviews of portfolios.