Client reviews pose catch22 for advisers

Wealth Professional
October 9, 2013 AEST

Advisers need to re-engage about 10 to 30% of their client base before they send out their Fee Disclosure Statements, according to Hans Egger, co-founder of the AstuteWheel client engagement platform.

Egger says a disengaged client is a client that hasn’t had a thorough review for at least 2 years.

The problem with disengaged clients is that they don’t feel like they have an active relationship with their adviser, so when they receive their FDS in the mail, they’re likely to question why they are paying those fees.

“From an adviser’s perspective, they know that they give good goals based advice and that if that client was to come in for a review meeting, they’d be better off as a result of it,” says Egger. “But how do they get that message across in the four or five minutes that they’ve got on the telephone with a client that’s not exactly happy with them?”

The best option for an adviser is to approach the client before they get the letter, says Egger. That way they have an hour or more to do a thorough review of the client’s needs.

However, the industry has put advisers in a tough situation when it comes to doing their client reviews. With Best Interest Duty in play, advisers now have to do longer reviews and dig deeper, says Egger.

As advisers conduct more reviews, which are also taking up more time per review, it’s important that they ask themselves:

  • Is it a thorough review process that’s compliant?
  • Is it an efficient review process that can be done in a reasonable length of time?
  • Is it a repeatable process that’s easy to do again and again?
  • Is it a process that the client ultimately finds valuable?

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