"Building strong and trusted relationships with clients is a pivotal skill for any financial adviser, however our research has shown that there is no room for complacency when it comes to retaining those clients."
- Simon Taylor, head of strategic partnerships at Investec Wealth & Investment
Financial advisers can't rest on their laurels when it comes to client retention, with one in three (31%) people saying they’re considering switching from their current adviser, according to a new study from Investec Wealth & Investment.
The research amongst 535 UK consumers with stock market-related investments found that of those clients who were thinking of changing their financial adviser, 37% are considering doing so in the next six months. Four in five (82%) are thinking about making the move within the next 12 months, and 92% say they think they will have switched within the next two years. Just 4% will wait more than two years before changing.
The survey indicates that the switch to another financial adviser may not be all down to how clients rate the quality of advice, with 34% rating the advice they receive as excellent and 52% judging it as good. Only 13% said their IFA or financial planner gave them average advice, and just 1% described it as being poor.
Men are more likely to be thinking of switching their financial planner (34%) than women (20%) and, once they’ve made the decision to switch, men are also more impatient to make the move quickly with 85% wanting to change advisers within the next 12 months, compared with 67% of women.
The findings may not come as a surprise to the nine in 10 (91%) financial advisers recently surveyed who say that they have seen clients becoming more demanding over the last three years against a backdrop of volatile financial markets and clients’ desire to have greater insight into how their investments and assets are performing.
Simon Taylor, head of strategic partnerships at Investec Wealth & Investment (UK), said: “Building strong and trusted relationships with clients is a pivotal skill for any financial adviser, however our research has shown that there is no room for complacency when it comes to retaining those clients. People are becoming better educated about the financial markets and want more information on how their investments are faring. There is a lot of competition amongst the financial planning sector and clients may feel compelled to explore other options if they believe another adviser may be better able to navigate complex financial situations or can help their assets deliver better returns.
“Research has demonstrated that working in conjunction with a DFM can not only help an adviser firm to grow their assets under management but also frees up time to enable the IFA to allocate more time to client relationships thereby supporting client retention.”
