While firms are seeing client enquires increasing, the high cost of compliance means it is crucial they ensure they work with clients who will ensure it is a mutually-beneficial relationship.
Marshall Brentnall, director and financial adviser at Evalesco, said he had seen between “nine to 12 client referrals over the last six weeks” which was higher than average for him.
“That tells us either our comms strategy is working or that people put off getting advice during the pandemic but now they realise it is time for them to get guidance,” Brentnall said.
According to the Financial Planning Association of Australia, the average initial cost of setting up a financial plan was around $3,300 and then about $4,300 annually to receive ongoing advice.
This was the reason, Brentnall stressed, that these enquiries were from “good quality” clients which and were likely to be worth the firm’s time and cost. There was a high level of upfront work for a new client and Brentnall estimated each one cost $1,600 before they even had the first meeting.
“You have to be selective as the time we have invested even before the initial discovery meeting would be around $1,600,” Brentnall said.
“This includes phone calls, two members of staff collecting information from them, collating their existing financial position, putting together a presentation… we try to do it all beforehand so we can get straight to what’s important when we meet them.
“The meeting would then typically take 75 minutes, or a bit shorter on Zoom, and then we would produce a terms of engagement which would take two to three weeks and then they would sign it and we would implement it.
“This means you have to be very clear on the type of client you want to work with, there is a lot of heavy lifting, so it needs to be a mutually-beneficial relationship.”