Clients highly satisfied with financial advice
Client satisfaction for financial advice has been the highest since 2012 despite relatively low profits, according to research released by Zurich and the Beddoes Institute.
The report found that over the past three years financial advice has become more client focused resulting in a high ‘Net Promoter Score’ (NPS) of +65 in 2014. This was a 25 per cent increase from 2013 with the score ranging from a minimum of -100 to a maximum of +100.
“In order to kick up your NPS you need to do solid work, be appreciative of increased customer satisfaction and service, produce great outcomes, and do that consistently for a period of time,” co-author of the report and director of the Beddoes Institute Adam Tucker said at the report launch.
Tucker also noted that there was a correlation between having a high NPS and a high profit bar.
Commenting on the 2014 financial advice environment Tucker said that advisors were working within a low trust environment that was getting harder due to media coverage of scandals and the back and forth movement of future of financial advice (FOFA).
“In the face of adversity these leading advisers have been more client-centric and have delivered better outcomes for their clients,” he said.
However, despite high customer satisfaction financial performance for these advisory practices saw a drop in revenue.
“In 2013 labour costs and overhead expenses went up as advisory practices really needed to start spending more on infrastructure and specialised staff,” he said.
“This affected profits where they fell from 35 per cent revenue to 25 per cent and in 2014 the picture doesn’t really look much better.”
Also speaking at the launch co-author and Zurich head of marketing and communication for life and investments, Richard Dunkerly, said “Advisers are becoming smarter, more efficient, and customer-centric ... the research findings are a positive outcome for consumers.”
Tucker also spoke about websites and mobile optimisation being business success pillars. The report found that 13 per cent of the over 300 practices interviewed did not have a website and were not planning on getting it.
“The most trusted advisers have a website and app. Digital is something financial advisers know they need and want to do but is difficult,” he said.
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