Understanding emotions key to advice, a.i. says
Knowledge of some of the basic principles of behavioural science can help advisers design better “advice experiences” for their clients, according to a new white paper from Advice Intelligence (a.i).
a.i. said its online goals-based advice white paper aimed to highlight the importance and benefits of providing goals-based advice.
“Goals are emotionally motivated, they are tangible and meaningful to clients. More so than outperforming markets by a percentage,” a.i. founder and CEO Jacqui Henderson said.
“Financial planning, by definition, is a goals-based conversation, yet there is much room for improvement in the way the ‘old world’ advice process has been designed.”
Goals-based technology can provide a clear link between the client’s goals, and how various advice strategies or investments can help improve their chances of achieving them, a.i. said.
“How many advisers can put a number as to how many goals they helped their clients to achieve? In the ‘old world’ I’d say not many. In the ‘new world’ advisers can say exactly. With goals front and centre, clients are constantly reminded of the 'why' that’s driving them, giving them a greater sense of control over their future,” Henderson said.
“According to our research, 70 per cent of Australians don’t know what their own life goals are, 25 per cent do, however only 5 per cent have them written down.
“This represents an exciting opportunity for advisers to help their clients to articulate these goals and set out a clear plan as to how they’re going to achieve them.”
Recommended for you
ASIC has released the results of its first adviser exam to be held in 2025, with 241 candidates attempting the test.
Quarterly Wealth Data analysis has uncovered positive improvements in financial adviser numbers compared with losses in the prior corresponding period.
Holding portfolios that are too complex or personalised can be a detractor for acquirers of financial advice firms as they require too much effort to maintain post-acquisition.
As the financial advice profession continues to wait on further DBFO legislation, industry commentators have encouraged advisers to act now in driving practice efficiency.
