A new Association of Financial Advisers white paper has uncovered what good financial planning practices do well – but also what they need to improve on.
The AFA 'New Frontiers: The Age of the Consumer' white paper is based on client surveys conducted by planning practices in the last four year via Business Health's CATScan system.
According to Business Health director Terry Bell, the survey of 12,000 clients is self-selecting in the sense that it only includes practices that want to survey their clients. In addition, the practices are encouraged by Business Health to primarily include their "A class" clients in the survey, said Bell.
The highest ranking key performance indicator for planners in the survey was 'relationship', which scored 4.46 out of five. 'Professionalism' scored 4.39; 'staff' 4.38 and 'knowledge' 4.31.
AFA chief executive Brad Fox said the white paper provided some evidence about what the best planning practices are doing when it comes to the client experience.
"There's been a defensiveness about what advisers have done and how they go about doing it. It's time for us all to get on the front foot and get down to what matters most: how we put consumers at the centre of the discussion," he said.
The lowest-scoring categories in the white paper were 'communication', 'range' (of products) and '[client] review', which scored 4.09, 4.05 and 3.95, respectively.
The white paper listed a number of actions that practices could undertake to address the relatively poor communications score.
Factors mentioned in the white paper include: whether or not the language used is friendly and easy to understand; the frequency of the communication; the format it is delivered in; and the tone of the communication.
According to Bell, a part of the CATScan survey that was not included in the white paper was the "freeform feedback" provided by clients.
The predominant gripe in the feedback was a lack of communication when there were changes in a practice's business.
"It could be staff person going, a change of office, a change of name or change or product manufacturer. If change has happened and the practice hasn't communicated it properly, clients get very nervous," Bell said.
"You can either communicate the change positively, or you can do nothing and let it slip – and all of a sudden there's a black mark against your name," he said.
According to Bell, the communication and the client review are also the lowest scoring attributes when Business Health conducts its survey overseas in places like Hong Kong and America.
