Fewer Australians use financial planners
Fewer Australians are using financial planners but remaining clients are happier, according to a report released by Investments Trends.
Furthermore, only 6 per cent of more than 1,300 adults surveyed support the traditional model of advice delivery.
The September 2012 Investment Trends Advice and Limited Advice Report found the number of active clients is down 20 per cent compared to the pre-GFC period.
But the remaining client base has reported much higher satisfaction this year than last, according to Investment Trends principal Mark Johnston.
"Part of this is market driven. It's always harder to say nice things about your adviser when your investments have just plunged, whereas this year's survey followed a six-month rally in equities," Johnston said.
"That said, you can clearly see the work planners are putting in, with strong improvements in client experience around technical knowledge, tax expertise and clarity of how fees are calculated."
The report also found that, when realistic costs are factored in, only 6 per cent of Australian adults intuitively favour the comprehensive, face-to-face, regular review model of advice delivery.
Meanwhile, 43 per cent of people preferred some other model of receiving the advice.
Johnston said the average planner took six and a half hours to deliver a full statement of advice, which has only come down slightly in the last eight years.
This sets a minimum price for advice, he added, and has always limited the proportion of the population that will access advice through this model.
"Changing current business models to efficiently deliver defined scope advice specific to people's current needs will be a key success factor for large institutions for the next five years," Johnston said.
"And the language around the discussion needs to change; scaled advice is a terrible description because it assumes advice starts small for low-balance clients and follows a steady growth path from there."
He added that, in reality, many high-net-worth clients also want specific advice, are willing to pay for it, but have no interest in the "all you can eat" advice model at the current time, Johnston added.
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