Planners' technical abilities in doubt
Clients of financial planners are questioning their advisers' technical abilities while still seeing them as trustworthy and reliable.
The contrasting views come out of research conducted for Lifeplan Funds Management by the University of Adelaide's International Centre for Financial Services which surveyed 400 financial planning clients.
Since the previous survey six months ago, perception of planners' technical abilities have fallen by 4 per cent while trust and reliability have climbed by 5 per cent.
Lifeplan Funds Management head Matt Walsh said the climate of ongoing regulatory change was one of the causes for the concern, leading to a possible loss of confidence and confusion about the changes.
"Clients have been exposed to the significant changes taking place in financial planning, such as the impact of FOFA [Future of Financial Advice] requirements including fee-for-service, which can easily be misinterpreted as critical of financial planners," Walsh said.
"There are two probable causes. Firstly, clients could well be thinking ‘there must be an issue if the Government is creating regulation to fix it'. Secondly, the effort of responding to the changes has distracted advisers from the very thing they'd prefer to be doing — working with their clients and giving quality advice."
Walsh said planners need to engage in active client communication to explain how they are tackling the new regulatory environment — and demonstrate they have the skills and knowledge to manage the changes.
The survey found that clients who had been with a planner for a short time were more likely to have a positive perception of their planner's technical ability than those who have had an adviser for a significant period of time.
"This is probably because advisers have spent more time with new clients than those they have had for some time. The perception of technical ability among those who have only had an adviser for two years or less has improved since the last survey, and it is those who have had an adviser for 10 years or more who have displayed a decline in their perception of their advisers' technical ability," Walsh said.
AUTHOR
Jason Spits
Recommended for you
Financial Services Minister, Stephen Jones, has assured the cost and time to enter the financial advice profession will soon be halved, as shadow treasurer Angus Taylor pledges to reach 30,000 advisers.
The positive results of the latest financial adviser exam have helped the advice profession reach 15,600 yet again, according to Wealth Data analysis.
Financial advice firms have told Adviser Ratings they are planning to increase their compliance spend by almost a third, including on enhancements to their cyber security which ASIC has identified as an enforcement priority.
The digital advice platform is officially launching into the financial advice sector, offering up its services to practices as a means of engaging with the next generation of clients.
