Clients still struggling to understand value of advice

Clients obtaining life/risk advice are still struggling to come to terms with the cost of obtaining advice, according to new research released by MetLife.

The research, released today, has found that a disconnect exists between the perceptions of cost and value when it comes to insurance and financial advice.

The findings are contained in the MetLife Adviser-Client Relationship Report 2019 – a quantitative study which covers both consumers and Small to Medium Enterprises.

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One of the positives to emerge from the study was that advised Australians were more informed about their insurance than this time last year but, despite this, confusion around the value of expert advice remained.

It said this suggested there was an ongoing need for financial advisers to demonstrate their value by properly educating clients of the benefits and service.

The report said that awareness of what advisers do and what those services should cost was low and that part of the battle for financial advisers was how to make the long term gains to be had from seeking expert advice more tangible in the short term.

“Advisers who are successfully bridging this gap appear to be setting and agreeing on realistic expectations for both clients and advisers in initial meetings,” it said. “Further, they are working closely with their client like a partnership and demonstrating ongoing care and value through simple measures such as annual reviews and contacting clients at important times in their lives, such as buying a house and having a baby.”

Commenting on the report MetLife Australia head of Retail Sales, Matt Lippiatt said the recent spotlight on the financial services industry had caused clients to take a more active interest in the financial products and services they hold and question the value they were getting from these relationships

He said this might explain why Australians know more about their insurance cover this year.

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When the bulk of the advisers tells the prospective client that the Fed Govt's Regulatory, Education & CPE regime & continual ongoing ASIC costs, PI Insurance, IT spend & staff/office costs has got to the point that we can no longer afford to assist you, watch these low income people start complaining to the MPs. It is starting already. The Parliament & the Haynes RC have created this ridiculous mess, & we are no required to pay for it. This has become ASIC overkill, with the outcome of even less advice being provided to the very people who need it the most.

Until there is a full independent review of ASIC, including staff gift registers, events attended, review of ASIC evidence gathering and interactions and policing policies there will never be any improvements.

Maybe the professional and representative bodies of the advice industry could do something useful and undertake an ongoing educational program to help people realise the value of professional advice. But given past performance they would probably stuff it up.

I tend to agree that it would be a waste. Some people have unrealistic understandings and expectations, and education will not help them. I see them occasionally and send them away after attempting to help. eg They want an investment property with a loan they can't afford. No matter what I say, they circle back to asking how they can buy the property, because they believe it will double in price every 4 years without any risk or work.

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