IFAs should be worried if their clients are only ‘fairly satisfied’ with their advice because it may be a sign they want to ditch them, according to new research.
Boring Money’s Clare McCay highlighted real-life reviews from some investors, who previously said they were ‘fairly satisfied’ with their adviser, but ended up leaving their IFA.
She warned that although 96 per cent of people, who receive ongoing advice, claim they are ‘satisfied’, 14 per cent of those investors say they are only ‘fairly satisfied’.
She added: “It’s an area to watch out for if people say they are ‘fairly satisfied’ because often they’re starting to think ‘Yes, this has been useful but I am starting to have reservations’.”
McCay, associate director of research at Boring Money, made the comments today (Wednesday) during a webinar to launch findings from The Advice Report 2024, which quizzed 4,500 people.
Holly Mackay, founder of Boring Money, added that poor investment performance is one of the drivers for investors losing interest with their financial adviser.
She added: “We definitely see from those who express reservation or who have been unhappy that performance is a key driver of that. Especially with the rise of passive alternatives in the DIY market. The people who are more likely to be dissatisfied are those looking at performance.”
Mackay added female investors can also be put-off by their adviser depending on how they are spoken to.
MacKay added: “One of the comments we got is ‘He laughed at my financial goals’. We still have the gender investment gap and some female investors don’t like how they’re being talked to or treated.”
The report highlighted five broad drivers of value for advice clients, which includes trust and peace of mind, planning, information, performance as well as fees and charges.
MacKay said: “We have to go to the person paying the fee to ask them what they value in order to say ‘Are we doing a good job or not?’ Fees and performance are the smallest component parts for people who get advice today. Trust and peace of mind is the most important part for advice customers.
"We are tracking that for advice firms today and helping them think through what is value, how well are we doing compared to others and where are the red flags.”
Advice-guidance
Analysis from The Advice Report 2024 aims to guide firms amidst the on-going change and opportunity for development from the advice guidance boundary review.
Data from the report revealed that just 9 per cent of UK adults and 21 per cent of investors currently receive advice and that seven in 10 investors have less than 100k.
Fortunately, the analysis found that the boundary review proposals will play some part in fixing the advice gap, which is currently made up of 12.4mn people with £703bn in wealth.
As part of the research, Boring Money asked investors if they would prefer personalised advice at a higher cost versus advice for ‘people like me’ at a lower cost.
