Are we worth engaging?

Do they provide value for money?

These are some of the questions our Financial Advice NZ Association asked a global research organisation to get answers to and in late 2020 they published their report.

Despite the obvious conflict of interest, of financial advisers paying for research on themselves, I was interested in learning what we could do better as a group.

• 8% of financial planners’ clients, on average, believed the service they were receiving was not suitable to their needs and goals.

Ouch. Could do better.

• 7% of financial planners’ clients, on average, thought that their financial planner could not demonstrate their progression towards their goals.

Double ouch. There are a significant number of financial planners are not meeting their basic job function.

• 6% of financial planners’ clients, on average, felt that their financial security had worsened since they first received financial planning advice while another 25% felt their financial security was largely unchanged.

What is going on out there?

The obvious question we need to address is whether any of our clients are in those groups of dissatisfied clients. And if they are, what could we do to improve their situation.

It is all very well to acknowledge that more than 90% of the clients in this survey, on average, were positive about their financial planners but that does not tell us anything useful. Feedback is only useful when we learn how to identify and fix mistakes and improve our clients’ experiences.

• 9% of investment advisers’ clients believed that they had not received any investment performance benefits in the previous year.

With that one some advisers appear to not be communicating with their clients. First off, investment performance should not be compared over such a short time period. Our traditional portfolios, tilted as they are to small and value companies, have been lagging the main markets for the best part of five years and are only just starting to shine in the past six months. It can take that long for a strategy to perform to its strength. It was perhaps a silly question, in a way.

There were some positive results from the research that are worth sharing as it was as unexpected as it was delightful.

The question was asked, “Aside from your finances, which aspects of your life have benefited from receiving financial planning advice?” Here we were looking for the intangible benefits of receiving financial planning advice. The results were more encouraging than I expected:

• 60% claimed they had improved mental health
• 41% claimed they had a better family life
• 24% had a better social life
• 21% had better physical health
• 20% had better work satisfaction
• 4% had better other aspects of their lives

Only 8% of financial planning clients reported no aspects of improvement in their lives beyond their finances.

Maybe some financial planners are trying to help in more ways than just financial. Perhaps some financial planners are successfully providing a more holistic service, treating the whole person rather than just their money. I hope so.

That is why I am a financial planner and it is why I love my job.

Keep asking great questions …