Survey suggests financial planning communications gap

Almost two in five financial planning clients completing a recent survey focusing on planner communication did not perceive they used the services of a financial planner, according to consultancy Leap of Faith.

The survey contacted more than 2000 clients from 10 major licensees in late 2011, including two institutions, and received around 400 responses.

It asked clients to select whether they used a personal financial planner, whether they were the clients of an institution, whether they used the planning services of an employer or industry super fund, or whether they were self managed.

Of the four options, just 62 per cent said they had a personal financial planner.

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Leap of Faith chief executive and founder Keith Wright suggested this may be partly because clients who use pensions or annuities may be considered, by themselves or their financial planners, as "set" or "passive" clients and may receive the bulk of their financial communications from an annuities provider such as Challenger rather than from their planner.

One financial planner contacted for the survey also suggested some clients who use the services of a planner for investment advice may consider themselves self-managed or self-directed investors.

The survey also showed that while just 11 per cent of clients said the primary form of communication from their planner was a personal phone call, 24 per cent would prefer this method over personal email or email newsletters, which together represented the primary form of communication for two thirds of clients.

Four in five clients said they already had an annual fee discussion with their financial planner, but there was a wide discrepancy in terms of current and preferred charging methods.

Thirty-three per cent preferred a performance-based fee, 29 per cent a flat fee and 13 per cent an hourly rate over the more common percentage-based fee, which was preferred by just 12 per cent of respondents.