The current market environment gives planners the opportunity to stop being ‘order executors’ and show the value of their advice, according to Damen Purcell, head of retail distribution at Australian Unity Investments.
After three or four years of dampened sentiment, many clients are starting to emerge from behind the cash wall and turn to equity and property markets.
“The fact that clients are now more willing to take on risk and look at growth assets means advisers can now show they add value by making recommendations about suitable asset classes that not so long ago would have fallen on deaf ears,” Purcell said.
“To best assist clients, advisers need to show the ability to develop portfolio construction strategies, and not be ‘order executors’ who follow their clients’ directions, which has tended to be the case since the global financial crisis for those clients who have insisted on sitting on cash.”
It is also an opportunity for product suppliers to give more support to advisers rather than just promote products, he said.
They will do so by providing the resources and data to help advisers communicate to clients an understanding of asset classes, Purcell added.
The biggest opportunity, according to Purcell, lies with clients who are still uncertain about moving back into markets.
“It’s understandable advisers might be nervous about arguing with clients, but they need to help clients understand they can’t sit on the sidelines forever and that they are already missing out on significant gains in the market,” he said.
“If the relationship is going to develop in the way it needs to in a post-Future of Financial Advice world, advisers need to stick to their guns and show the value of their advice.”
