Experienced investors shun institutions
An inaugural survey of investor perceptions by the University of Adelaide’s International Centre for Financial Services (ICFS) has found that experienced investors are biased towards receiving advice from independently-owned planners.
The Value of Independence survey of more than 400 Australian investors with a financial planner found a majority of respondents wanted their planner to be “independent of financial institutions”.
It also found that experienced investors, defined as those receiving advice for up to 10 years, largely regard institutionally-owned planners as being “constrained in their product choice”.
Independently-owned planners are also largely perceived as more trustworthy than institutionally-owned planners, defined as acting in an investor’s best interest and not that of their employer.
“What we found is the longer investors receive advice and have a relationship with an adviser, the more they have a desire to be sure they are getting independent financial advice,” ICFS director Clive Perring said.
“It was a consistent trend among these investors to receive financial advice that they perceive to be in their interests and not in the interests of financial institutions,” he said.
The survey revealed there are “about three times as many investors who agreed adviser independence is important to them as there are those who say it is irrelevant,” he added.
“This suggests experienced investors understand the fluctuations and behaviours of the market, and they seem to be biased towards independent advice.”
They were also found to be “more focused on the long-term plan, the quality of the plan and the trust or rapport they have with their planner”.
By contrast, he said the survey found that newer investors and those with smaller amounts of funds are “inordinately focused on portfolio performance, and were thus very neutral about whether their planners are independently-owned”.
The survey respondents were ranked by age, the size of their investments under advice and the length of time they have been taking financial advice.
Each respondent had to have been receiving advice from a bona fide financial planner at the time of the survey in September last year, and for at least a year.
The survey, which is comprised of 12 questions, will henceforth be conducted every six months by the ICFS, with the next one due out in March.
Recommended for you
The FSCP has announced its latest verdict, suspending an adviser’s registration for failing to comply with his obligations when providing advice to three clients.
Having sold Madison to Infocus earlier this year, Clime has now set up a new financial advice licensee with eight advisers.
With licensees such as Insignia looking to AI for advice efficiencies, they are being urged to write clear AI policies as soon as possible to prevent a “Wild West” of providers being used by their practices.
Iress has revealed the number of clients per adviser that top advice firms serve, as well as how many client meetings they conduct each week.
