Would-be clients walking away

Potential financial planning clients are giving up because they can’t get appointments to see advisers.

That is the bottom line of new CoreData research, the result of a shadow shop exercise involving more than 300 people who were asked to go through the process of seeking to become a client.

The exercise saw one-third of participants dropping out, mostly because of the difficulty in getting through the door, with most expressing frustration at having to wait up to six weeks to make an appointment.

The principal of CoreData-brandmanagement, Andrew Inwood, said the findings had emerged at a time when planners were still finding it “really hard to explain their value to clients as a result of the global financial crisis”.

However, the director of Queensland-based Bull Financial Group, Leanne Bull, said if practices were busy they usually gave priority to existing clients and provided them with appointments within reasonable timeframes.

“If you’re a new person and haven’t been to the practice before or haven’t been referred, unfortunately you’ve got to fit in with the policy,” Bull said.

Another reason given by CoreData’s shadow shoppers for cancelling their appointments was being asked to pay an upfront fee for the privilege of an initial appointment.

“It’s really important that [planners] are able to articulate what they do, how much they charge and how they charge,” Inwood said. “When they can’t answer those questions, clients will find it really hard to engage.”

Bull acknowledged around 50 per cent of potential clients dropped out when they heard about the initial charge, but claimed the main reason for introducing the ‘first appointment fee’ was to make sure clients were serious about getting advice.

However, Noall & Co managing director and Association of Financial Advisers director Marc Bineham said the results of the shadow shop were surprising. He claimed that very few financial planners in the country charged for initial appointments or put clients on waiting lists.

“I don’t know one adviser who doesn’t say at least the first hour would be free, and that’s become a standard practice in the industry,” Bineham said. He added that planners coming out of the financial crisis were finding it difficult to find clients rather than pushing their appointments back six or seven weeks.

According to Bineham, financial advisers may have become aware of shadow shops and become sceptical “when someone just calls out of the blue”.

“They’re trying in some way to qualify whether this is actually a proper person looking for advice or someone just trying to do a survey on them,” Bineham said.

According to CoreData, the shadow shop participants were people who were actively seeking advice or changing adviser, were between 45 and 60 years old, had more than $150,000 in investable assets or superannuation and had between two and 20 years until retirement.