Advisers risk losing clients

Almost a third of advised Australians last heard from their financial planner more than a year ago, which puts them "at risk" of switching, a report says. 

The CoreData Keys to Growth Report identified this as a dual growth opportunity for financial advisers: to identify and keep those who may be at risk of switching, and to acquire new clients looking to leave their financial adviser. 

The report, which was based on a survey of more than 1,500 advised and unadvised Australian consumers, segmented the client base into four groups according to the frequency of contact they have with their financial planner. 

The so-called 'bonded' group either met with or was contacted by their adviser in the past six months; 'firm' and 'loose' client segments have heard from their advisers in the last six to 12 months, while the 'at risk' group last met with their planner more than a year ago. 

Around 60 per cent of respondents classed as 'at risk' last met with their advisers more than 12 months ago, while one third have not received any contact from their adviser for more than a year, the report says. 

"Many Australian advisers are making the fundamental mistake of not keeping in regular contact with their clients," said Salvador Saiz, head of advice, wealth & super at CoreData. 

"Markedly improving client retention is as simple as picking up the phone, and scheduling in a meeting, but we see that many advisers, especially those with high proportions of clients who are in danger of leaving, are failing to do this." 

The report also found that two out of three Australians over the age of 18 do not currently have a relationship with an adviser, which represents an untapped opportunity for advisers, Saiz said. 

While many intend to enter the market for financial advice, the majority don't know which adviser they would use, according to the survey. Commonwealth Financial Planning leads the list of dealer groups likely to be used, followed by AMP Financial Planning. 

"There is a huge opportunity for financial advisers to target the large market of unadvised Australians, and making the most of this opportunity is not difficult," Saiz said. 

"The top things that an advice seeker wants are help setting their financial goals, and ability to demonstrate expert advice on investment strategy, super and tax. Most advisers already possess these abilities; all they need to do is get the message out there."