Survey rebuffs naysayers: advice satisfaction hits all time high

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The results of an academically conducted survey into investors’ attitudes towards financial advisers have completely rebuffed those of recent surveys that apparently show growingly negative perceptions about the industry.

The latest results of the Lifeplan Funds Management financial advice satisfaction index have revealed that investor satisfaction with financial advisers is at its highest level since the inception of the index in 2007.

Conducted by the University of Adelaide’s International Centre for Financial Services every six months, the survey looks at changes in investors’ attitudes towards their advisers, including their perception of their trust and reliability, technical ability, and investment performance.

The latest satisfaction index has increased to 74.5%, up from 72.3% in October 2013.

Head of Lifeplan, Matt Walsh, told Wealth Professional these latest results counteract other recent surveys which say the perception of advisers is negative.

This could be down to the method in which some surveys are undertaken and the way that the questions are asked.

The Lifeplan advice satisfaction index is sound, Walsh said. The latest process included talking to 403 investors who use financial advisers, and having the results analysed on an independent and academic level.

He said people will generally give a different answer if they are asked: “what do you think of financial advisers” than if they were asked: “what do you think of your adviser”.

“There’s a dichotomy between what people say about their own planner to how they talk about the perception of the industry. This survey uncovers what people say about their own planners,” he said.

Walsh said the survey reveals the “green shoots” of the new advice industry, which is now starting to regain momentum after the GFC.

Advisers have recovered and even slightly exceeded the levels of pre-GFC satisfaction, and in many ways the GFC has helped the industry to shape itself in a better way, he said.

“It’s made the necessary changes, responded to them, and now we’re seeing the rewards of that. I think with [the levels as they are] advisers will withstand a shock to the market if it does fall, but if it stays steady we’ll see a rise.”

Importantly, Walsh said that more recent improvements in the domestic and global landscape are not the sole reasons for the increase in satisfaction – much of it is down to the advice profession itself.

When academics analysed the results of the survey in comparison with the market performance, they found it couldn’t completely explain the increase.

Walsh said that a de-coupling from advisers once selling themselves based on their market performance to post-GFC having to demonstrate a more holistic set of skills has been a big driver in the increase of investor satisfaction.

The survey’s results, on the back of the implementation of FoFA, reinforce the importance of the government’s decision to pause any wind-back of the reforms, he said.

“Reintroducing commissions for example could seem innocent but potentially [unleash] the ogre of how the industry is perceived, because it is all about perception,” he said. “It indicates to me that the pause should be continued for longer, [the changes] shouldn’t be rushed into, and research, such as ours, should be considered. They need to make a very informed decision.”

Walsh said while some of FoFA’s practical or efficiency-based changes won’t pop up on a client’s radar, any fundamental changes could affect the relationship between advisers and their clients.

He also said that if advisers want the positive public perception to continue today and beyond, they need to be wary of trying to attach too much credit of good market returns with their own performance.

“Because when the markets fall, they will fall with them,” he said. “We need to push the long-term and holistic nature of advice. Advisers should hold their ground – it’s important that they sell the whole value proposition.”

Apart from these warnings, Walsh said the financial advice satisfaction index results are a “real tick of approval” for the industry.


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  • Funky Goose on 1/05/2014 11:22:30 AM

    Agreed Innocent Observer. We have received many referrals over the years from existing clients whose friends/colleagues have had a bad experience and they have recommended us to help them out. The disappointing aspect to the regulator and media approach is that rather than stating that the bad apples highlight the importance of seeking quality advisers they do the opposite by using the bad apples to infer that all advisers are bad. The concern is that they are manipulating public opinion and being played by the banks and industry super funds that going direct to them will help the unadvised - when in fact this will worsen the problem by endorsing product flogging and poor advice/service standards.

  • Innocent Observer on 1/05/2014 10:17:31 AM

    @Funky Goose is spot on…. however it's also about the way the question is asked. I hadn't really thought about this before.

    For example, if you were to ask my clients what they thought of financial advisers, I bet there would be a fair chunk who would recite the ISA propaganda…. But ask them what they thought of me, and the answer, I am sure, would be very different. For example, how often have you (as an adviser, presumably) been chatting to a client when they bring up some story of their neighbour Joe's fifth cousin who know someone who got screwed over by a financial planner? Then they make the connection that you're not like that, but financial planners are still generally scumbags. After all, the ISA told them so.

    Anyway. It would be interesting to see more detail as to the profile of clients surveyed - i.e., insurance or investment or both… level of assets etc. I would be guessing that levels of satisfaction among those with small account balances might be lower than average, simply because client/adviser engagement is usually a lot lower.

  • Funky Goose on 1/05/2014 9:34:43 AM

    Surprise surprise. A survey that asks clients in an advice relationship what they think rather than the perceptions of those not engaged with an adviser. When will the media and regulators wake up to the fact that they are being played by the industry super funds.

WP forum is the place for positive industry interaction and welcomes your professional and informed opinion.

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