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ANZ: Why Clients Come First in Financial Advice

  • By Kylie George Financial adviser, Harvest WealthPublished 
  • With Permissions from ANZ BlueNotes – Connecting News and Insights

Kylie is the winner of the 2015 Association of Financial Advisers Rising Star award, which celebrates excellence in the advice industry and recognises the next generation of financial advisers.

Financial advice is often seen as a complex thing but in many ways it is quite simple. In my view, if advisers put clients at the centre of everything we do, we will never go wrong.

I believe while we have many professionals within the advice industry, we aren’t quite seen as a proper profession just yet. The good news is we are getting there quickly.  Our industry has had many achievements but it is obvious we still have more to do to be seen as legitimate by those outside the sector.

In the past, the focus in financial advice was on getting a financial return for clients but over the past few decades it has transformed into focusing on what is in the client’s best interests, what they want to achieve in their lives and how we can put a plan in place to get them there.  Yes returns are a part of this but there is a lot more.

” [Financial] coaching is completely different from anything you can get from a computer program … I believe this is where financial advisers really add value both now and in the future “

~ Kylie George 

Financial adviser, Harvest Wealth

I started in the financial services industry over 20 years ago and I have been a practising financial adviser for almost four of those.  There are many good advisers out there, achieving great things for their clients but, sadly, recent events in the financial services sector have seen public perceptions damaged.

A recent survey from RaboDirect shows perceptions toward financial planning have fallen amid a rise in negative media attention.

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The study showed 40 per cent of those surveyed in 2014 trusted financial advice but in 2015 that dropped to 29 per cent. The split was evident across generations, with trust from Gen Y falling from 49 per cent to 39 per cent, Gen X from 41 per cent to 26 per cent in 2015 and Baby Boomers from 31 per cent to 23 per cent.

This shows we have plenty of work to do.

The good news is those not doing right by their clients are in the minority. According to the The Beddoes Institutewhen ranked according to the Net Promoter Score, financial advisers deliver above-average customer service. A NPS score higher than 0 is considered good, on average advisers scored an NPS of 27.

CHALLENGES

Like any industry, unfortunately it is difficult to totally cull out those who are not doing 100 per cent right by their clients. When it comes to solving these issues, I believe they need a targeted response, rather than blanket changes thrown over the industry that don’t help our clients.

In saying that, I do believe changes in minimum education standards, a hot topic in the industry, could help. But I also believe we need to be very careful and logical about how it is implemented or the sector will lose a lot of good people.

The financial advisers I have learned from in my career have come to financial advice later in life. If the barriers to entry become too high, we’re going to miss out on some talented people. Having said that, I do agree we need a higher entry level.

I’m one of these people myself and wouldn’t have been able to advise now if a relevant degree was required to enter.  I went down the ‘apprenticeship’ road and was lucky to learn from some of the best in our industry, while I continued my studies.

In April the Federal government delayed the introduction of new rules aimed at minimum education standards for financial advisers. This news was welcomed by the Association of Financial Advisers (AFA) which has called for a more flexible and practical approach.

At the time AFA CEO Brad Fox said changes shouldn’t force some of our most experienced advisers from the industry. I think Brad has got it right. We definitely need to lift education but we also need time to adapt to the changes as we can’t put our clients and businesses on hold while we do so.

Again, a lot of what advisers do is about people, not just dollars or numbers. You can’t learn human interaction from a book – you only learn this aspect from being involved in client appointments and from actually doing.

INSTANT GRATIFICATION

New, modern technologies like social media have given consumers a new perspective on what financial success is and what can be achieved through it.

However, sometimes clients are unsure of their goals, they don’t know what is possible.  In client meetings we discuss possibilities and uncover what is important to them. Then we work out how to get them there financially.

I like to refer to what we do as life planning rather than financial planning. The financial side is necessary but it’s not sufficient.

I believe in the future advisors will have more of a coach role. Consumers will be much more informed about financial services but will still need someone to keep them accountable and show then the trade-off between needs and wants both now and in the future.  There is no right or wrong answer in these discussions, it only about uncovering what priority a client has at any point in time.

That kind of life coaching is completely different from anything you can get from a computer program, or what so-called ‘roboadvice’, can offer.  I believe this is where financial advisers really add value both now and in the future.

As a sector we need to get back to the basics of helping our clients achieve their goals. As I said: if we put our clients at the centre of everything we do, we can’t go wrong.

Kylie is the winner of the 2015 Association of Financial Advisers Rising Star award, which celebrates excellence in the advice industry and recognises the next generation of financial advisers.

Original Article: Why clients come first in financial advice

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