Are planners giving clients what they want?

Financial planners are missing the mark on the technology front, with practices and clients suffering as a result, according to Investment Trends’ research director, Recep Peker.

Peker told Money Management that in the Investment Trends 2018 Planner Technology Report, it was found that practice profitability had gradually decreased from 72 per cent in 2014 to 53 per cent, and compliance burdens and lack of business efficiencies were to blame.

As well, the report indicated that in the last year, the average adviser added 20 new clients, but they lost 35 active relationships.

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“And it’s not so much that the client is leaving the adviser, it’s the fact that the inefficiencies in their business isn’t giving them the time to be able to get to all of their clients,” he said.

In terms of client engagement, 55 per cent of advisers said they sent regular newsletters out to clients and 35 per cent gave clients access to view their position online, but only six per cent of planners gave clients access to track their goals.

“Very few give clients the ability to use modelling tools online or access investment research,” he said. “The online access they’re giving to clients is more a read only view where the client can log in and see their situation.”

And while 35 per cent might seem like a lot, the report pointed to a big gap between what clients want and what planners deliver, with 85 per cent of clients expecting full online access to see how they are progressing towards their goals.

Peker said as far as technology adoption went, where Australia used to lead its UK counterpart, it now trails as a result of the Future of Financial Advice (FoFA).

“Even if you look at the youngest group of advisers, they’re equally keen to be using certain things but the level of actual adoption is higher in the UK than in Australia. This is interesting because before FoFA, Australian financial planners were ahead of their UK counterparts.”

The report pointed to increased regulation as a burden on the industry, with planners “too busy trying to stay afloat” to adopt new technologies in their businesses.

While planners weren’t exactly meeting their clients’ needs, Peker said 88 per cent were aware and willing to expand the range of digital methods through which they engage their clients.

Peker also said platform providers who intended to serve the industry in the future need to deliver client engagement that the next generation of financial planners expects.

“If providers want to future proof the functionality and tools that they deliver then they need to keep this in mind.”

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