Survey: market volatility affects client loyalty and recommendations

The latest ING Australia research on client and adviser expectations has found that a key measure for a client to recommend an adviser has dipped in 2008.

A long term client-adviser relationship and frequency of contact is a key factor in client recommendation especially if this relationship has existed for more than 2 years. 

But the research has found those “highly likely” to recommend has dropped from 45 per cent to 40 per cent in the last year, where the relationship length is 2 to 5 years, and dropped from 46 per cent to 35 per cent, where the relationship length is more than 5 years.

This result comes from ING Australia commissioned Nielsen research that surveys over 700 consumers and more than 250 financial advisers in June and July to better understand consumer perceptions of financial advice. 

The research is now in its third year and is providing good trend information on key perceptions and expectations including the role of the financial adviser; attributes of a good financial adviser; propensity to recommend an adviser; satisifaction levels; and the “gap” between the consumer and adviser.

Ross Barnwell, ING Australia Executive Director of Sales & Marketing, said the results highlighted the need for advisers to be even more vigilant with their client relations during tough times.

“Client satisfaction is off the highs of 2007. This is the third year of our client and adviser expectation research and this year’s results show a small decline in very satisfied clients, and the fundamentals of what clients want has changed.

“In 2008 clients expect their adviser to clearly understand their financial goals. You would assume this is a “given” but clients now expect a stronger focus on this aspect of advice than in previous years.

“This year clients are less impressed with their adviser’s track record for recommending good investments and want the adviser to take clear responsibility for their actions.

“We’ve come off the back of ten strong years of investment growth and clients are telling their advisers that now is the time to prove your expertise.

“The current market volatility has impacted on client views of adviser performance and in this climate it’s imperative that advisers maintain regular contact with their clients.

“ING will use the research results to reinforce to our advisers and dealer groups that a strong and beneficial client relationship is about regular contact, portfolio reviews, and a full understanding of client needs," said Mr Barnwell.