In a commentary piece, IOOF said that an advice strategy focused on clients setting specific goals is the easiest way for an adviser to bring value to a client.
IOOF cited its survey of more than 300 clients for its July 2014 white paper, The Expectation of Advice, which found 76 per cent of clients defined ‘achieving core goals and lifestyle objectives’ as the primary indicator for a successful ongoing financial planning experience.
Only 14 per cent of clients said a ‘better-than-average investment performance’ should be the primary definition.
IOOF said reframing the advice conversation around specific goals can have a positive impact on your business, with clients almost three times more likely to refer over the next 12 months.
It further added that longevity risk is also becoming increasingly relevant in financial advice, and goals-based investing allays this risk as it separates goals across the different stages of retirement rather than drawing from the same pool of funds for their whole retirement.
IOOF group general manager of wealth management Renato Mota said tracking a client’s investment against a tangible goal will strengthen their engagement with financial advice and provide greater motivation for saving.
“Achieving a certain goal also builds confidence in the approach, which in turn reinforces the desire to maintain this approach,” Mr Mota said.
“All too often clients will sell out of investments at precisely the wrong time in response to a market downturn or volatility – regardless of how that investment is tracking towards a goal.
“Goals-based investing also addresses the fact that many clients’ goals happen at very different times and may require very different portfolios to achieve.”
How about if the client goals are to arrive at retirement totally debt free? They want minimum funds available to be taxed on and want to push as much money into Panama as possible! How does the adviser approach that?
Are you people really that far off the track?
That’s the difference between those who have no idea telling those who are doing – what to do!
I don’t know about everyone else but my compliance department has always required me to provide advice that I can demonstrate meets my client’s goals… Pretty straightforward stuff and it should be assumed an adviser doesn’t need to be told this surely…
Welcome to the 21st century, IOOF.
Who would have thought that Clients don’t want their adviser to be a distribution arm for major instituions products.
They want advice that helps them to meet their goals.
Good to see Large Institutions catching up to the IFA space…