Consumers still wary of advisers
Independentratings company Adviser Ratings claims almost a third of planners have noticed a change in business volumes since the release of theAustralian Securities and Investments Commission(ASIC)/Australian Consumers’ Association (ACA) report into the quality of financial advice, with 67 per cent of these noting a decrease in business.
The findings were revealed in a follow up survey of 400 respondents from the same sample as the initial survey, which canvassed the opinions of about 700 planners in February.
The survey also showed significant changes in advisers’ time allocation during the period between surveys, with 94 per cent of respondents spending more time on existing client service and communication, and 89 per cent spending more time providing comfort for existing clients.
There has been a corresponding decrease in time spent on both new client interviews and plans (58 per cent) and on marketing for new prospects (52 per cent).
Adviser Ratings chief executive David Child says: “This dramatic change in time allocation basically says that further down the track for those people who need new business, it’s going to get tougher rather than easier”.
Since the ASIC/ACA report’s release, 43 per cent of advisers surveyed had reviewed or audited their practice and procedures, with 27 per cent making changes. Only 28 per cent had initiated contact with clients regarding the report.
On the issue of future industry actions to improve the quality of financial advice, such as moving to fee-based remuneration, improving policing and prosecution, and raising the entry level for financial planners, the results were consistent from February to April.
“You’d expect a change to take place during the cooling off period, but there is a groundswell of frontline opinion which recognises that these actions are important, so I find it encouraging that there hasn’t been a major shift in opinion,” Child says.
Recommended for you
ASIC has released the results of its first adviser exam to be held in 2025, with 241 candidates attempting the test.
Quarterly Wealth Data analysis has uncovered positive improvements in financial adviser numbers compared with losses in the prior corresponding period.
Holding portfolios that are too complex or personalised can be a detractor for acquirers of financial advice firms as they require too much effort to maintain post-acquisition.
As the financial advice profession continues to wait on further DBFO legislation, industry commentators have encouraged advisers to act now in driving practice efficiency.
