Financial advisers need to engage young dissatisfied investors

Young investors, those who have only used a financial adviser for a short time, and those with minimal investments are the most dissatisfied when it comes to financial advice.

That's according to the results of the latest Lifeplan Funds Management/University of Adelaide's International Centre of Financial Services (ICFS) Financial Advice Satisfaction Index conducted last month.

The survey evaluated the responses of 410 investors in relation to their perception of trust and reliability of financial advisers; the perception of an adviser's technical ability; and the perception of investment performance.

According to Lifeplan head Matt Walsh, the client categories that showed a decline in satisfaction across all three criteria were those aged under 30; those with less than $50,0000 to invest; and those who had been with their financial adviser for less than two years.

Despite the survey being undertaken during a particularly volatile period for global markets, Walsh said financial advisers could do more to attract and retain clients in these categories rather than just waiting for markets to regain their stability.

"Perceptions of trust and reliability in particular are affected by regularity of contact with someone, how open and transparent they are, and whether they do what they say they will do."

Experience Wealth Advice director Steve Crawford agrees with Walsh. He said that in regards to generation X and Y investors, financial advisers need to be in contact with their clients on a monthly if not weekly basis.

Crawford said communication can be enhanced by using monthly e-newsletters, Facebook updates, or tweets on articles that clients need to read.

He added that non-traditional technology such as software that gives real-time cashflow updates adds real value to the relationship with an age group that is particularly focussed on managing their spending and savings.

In other results, the study found that clients who have been with their advisers for more than five years have a more favourable perception of financial advice because they tend to have higher levels of financial literacy than their younger counterparts, Walsh said.

Meanwhile, satisfaction levels among female investors were found to be greater than that among male investors. Walsh said this was particularly true of females under the age of 30.

"Female investors' positive perception of advisers could signal an opportunity for advisers to expand their client base," Walsh said.

Money Management Top News Stories