Size Matters
Two out of three people looking for financial advice believe large dealer groups provide a comforting layer of security, while three out of five believe big advisory groups help planners provide better advice.
However initial findings from an extensive shadow shopping exercise reveal in one out of six instances potential clients are not given Financial Services Guides, while privacy issues and Product Disclosure Statements are only discussed and provided in two out of five instances.
The above are just some of the near complete findings from a broad mystery shop of the Australian financial planning industry by CoreData – the consumer research subsidiary of industry consultancy brandmanagement.
The aim of conducting this research is to measure relative performance and provide dealer groups with insights using real people who are actually seeking the services of planners as to how their advisers compare against a set of absolute benchmarks and to other groups in the industry.
CoreData is close to completing 600 events of the largest 30 dealer groups by funds under advice using real shoppers who are either looking for financial advice or currently have a planner and would consider changing.
For the past few months CoreData has been sending advice seeking consumers into the market to engage with planners.
The research will culminate in a new industry award – The CoreData IFA Major Dealer Group of the Year – and will be announced later this month.
The introduction of this award will hopefully contribute to other work being done across the industry aimed at raising standards.
It is not to take a sledge hammer to the planning industry but to provide dealer groups with a tool to benchmark themselves and better assist their representatives in meeting the needs of clients.
There are eight awards up for grabs – seven individual categories and one overall winner.
Consumers were split into five core categories – devised to accommodate the broad range of advisory services offered by Australian planners and dealer groups.
The categories were Mass Affluent Pre-Retirees, High Net Worth Pre-Retirees, Mass Affluent Post-Retirees, High Net Worth Post-Retirees and Mass Affluent Pre-Retirees seeking Risk Advice.
3 Comments on “Size Matters”
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Craig says:
The 600 people involved were primarily made up of people who didn’t already have a planner, the were some who did have a planner. But these were randomly selected and not exclusively from large dealers.
So the findings are not drawn from a bias sample favouring large dealers over small licensees.
Craig says:
Hi Terry, to answer your question, the aim of the project was not to send every type of possible client in to seek advice from a planner, but to cover the 30 dealer groups shopped with potential clients that they would normally service. For instance a bank planner may have a larger client book of mass affluents while a more specialist group may have a higher proportion of high net worths.
The cost was significant just using the shopper types mentioned in the article, perhaps in future shopper studies we can expand the client types used if the support from the industry is great enough.
Philip Hart says:
FYI