In uncertain times, it is more important than ever to seek expert advice when it comes to finances. So, it’s worrying that clients are leaving their existing financial advisers in numbers – suggesting they are not receiving the support or service they need.
Indeed, a report by Morningstar suggests that 32% of clients polled stopped working with their advisers due to the quality of financial advice and the services offered.
So, if your clients are considering their finances and wealth and are asking themselves “do I deserve better from my financial adviser?”, read on to find out the five most common reasons why they leave and why working with a new adviser could provide them with the support and reassurance they need.
1. A lack of quality in advice and the services offered
In the poll carried out by Morningstar, the most common reason (32%) for a client firing their current financial adviser is due to a lack of quality in the advice given by the adviser.
Clients may well not understand the value of the advice given, especially if they don’t know how it connects back to their goals.
One solution for any clients you have who are concerned about the advice they are receiving is to switch to a Chartered firm.
Chartered status is the “gold standard” of financial planning, with Chartered firms providing first-class advice and working to the highest ethical standards.
2. Poor communication and lack of a strong relationship
Research by Morningstar suggests that many clients (21%) aren’t happy with the quality of relationship they have with the adviser. Similarly, they don’t feel there is enough communication from the adviser about how they are meeting their needs.
Successful client and financial adviser relationships are often based on the adviser taking the time to understand the client as a person and an individual, not just ”how much wealth they have”.
So, switching to an adviser who puts the client’s goals and ambitions at the centre of the financial plan can ensure a strong relationship where advice is always tailored to your client’s goals.
3. The cost of services
17% of Morningstar’s polled investors believe that the cost of the services doesn’t match the quality of the service provided by their financial adviser, so start looking elsewhere.
While they might be tempted to cut costs entirely and go it alone, it is important that any investor looks into how another financial adviser could provide them with the value they need.
For instance, it is often the case that the client isn’t necessarily unhappy with what they are paying; they are more dissatisfied with the perceived value of what they are paying for with their current firm.
4. Disappointment in return performance
Surprisingly, the primary decision to leave a financial adviser is often not down to a client being unhappy with returns, with only 11% of the polled investors indicating this was why they did so.
Again, this can often stem from a misunderstanding of not only investing but also what financial advisers do.
Goal-based financial planning is about ensuring that your client has enough resources to do the things they want to with their life. That might be to retire early, gift money to family, or start their own business.
Returns are the engine that powers a financial plan, so your clients need a planner who will look at what they want to achieve first, and then make recommendations as to how they can get there.
5. They felt comfortable enough to deal with their own finances
The fifth most common reason why investors leave their financial advisers is because they feel comfortable dealing with their own finances.
While some individuals do see some success when going it alone, drawing on the experience and expertise of a financial adviser could be far more beneficial. As well as the specialist knowledge that only a financial adviser can offer, your clients might also not have the time to carry out research and monitor their portfolio efficiently. They may also fall foul of complicated rules surrounding tax and pensions, with any mistakes likely to be costly and irreversible.
Just as your clients trust you for professional advice rather than trying to “do it themselves”, a financial adviser can add the same value.
Finding a new firm could be the best option for your clients
If you have clients who are thinking about leaving their financial adviser, or they have concerns about the advice or service they are receiving, maybe now is the time for a fresh start.
When asked about the benefits of working with Sovereign, most of the time our clients don’t talk about investment performance or the growth in value of their wealth. Most of them talk about the peace of mind of knowing that they have an expert they can turn to for guidance, and the reassurance they are on track to reach their goals.
If you have any clients who would like to discover what we can do for them, or you’d like to work more closely with us, please get in touch. Email email@example.com or call 01454 416653.