Potential clients say no to advice

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CoreData’s 2012 Financial Planning Shadow Shop has revealed a decline in the intention of potential clients to seek financial advice.

From August to November 2012, shadow shop participants aged between 40 and 60 shopped across 16 of the industry’s major dealer groups. They were actively seeking advice or looking to switch from their current adviser.

Intentions of clients to commit and proceed to a second meeting weakened slightly over the past year. The Intention category of CoreDatas ACQUIRE Index, which shows whether would-be clients were prepared to use or recommend financial planner services, fell from 55.2 in 2011 to 52.

There was also an overall decline in the ability of financial planners to acquire new customers, with the ACQUIRE score falling from 70.1 to 67.8.

The investigation revealed a heightened focus on the value of the planner’s service.

“The findings suggest it is really important that planners are able to demonstrate the quantifiable or tangible benefits of seeking advice, given the cost to would-be clients,” said head of advice wealth and super at CoreData, Kristen Turnbull.

“Often it is the intangible benefits – such as peace of mind and certainty – that are most valued by those clients who have a dedicated financial planner, however in the current environment prospects are heavily focused on how much the service costs and what they get in return.”

The number one expectation potential clients had for a financial adviser was honesty and transparency, highlighted by 72.5% of would-be clients. This was followed by 51.8% who cited value for money.

Ability to enthuse was the second biggest driver, followed by the ability to influence, recommendations suited to client needs and the ability to build relationships.

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