New report exposes confidence gap between advisers and clients in goal achievement

According to The Value Gap, a report from Effortless Engagement that surveyed 635 ongoing advice clients and 312 individuals from within advice businesses, clients said the highest-rated factor that would ultimately define the success of their advice relationship is through the achievement of their goals and objectives in their desired time frame.

Unfortunately, clients were only moderately confident that this would be achieved.

“When it comes to confidence that the client’s goals and objectives will be met, we found that adviser confidence levels were very high at 92 per cent. By contrast, client confidence levels were far more moderate at 57 per cent,” explained Dean Lombardo, principal of Effortless Engagement.

The report also found that there was a range of missed opportunities for advice businesses to foster client confidence surrounding goal achievement.

“It can be difficult for existing clients in review meetings to walk away feeling confident that they are on track and likely to achieve their goals when less than one in five advisers provide projections to clients annually and less than one in 20 advisers have a method of actually evaluating client progression across all advice areas,” Mr Lombardo added.

According to the report, the forward-looking nature of projections are a significant tool to provide confidence in outcomes, however, advisers typically only prepare projections for new clients and when significant strategy changes are being considered for existing clients.

“Perhaps this is why many advisers only consider the use of projections for the development of a statement of advice and not as a mechanism for the delivery of ongoing client confidence,” the report said.

“The reality is that a client’s plan and goals are dynamic and not static. This means that changes are constant. The value therefore of providing updated projections, at least annually, is immense in delivering client confidence and demonstrating the probability of success of an ever-evolving plan.”

The report also provides insight into current business issues and frustrations affecting the ability to advise clients. Advisers are spending up to 70 per cent of their time on back-office work, the report found, while more than 80 per cent of team members feel like they are at capacity, yet less than 10 per cent of advice business have a capacity plan.

“Systemically, there are poor business practices impacting business performance and the client experience,” Mr Lombardo said.

“What we found was when client confidence levels were at similar levels to advisers (highly confident), they had twice the perception of value, 70 per cent less money worries, and were three times less likely to be thinking of receiving alternative advice.

“So, the opportunity to systematically create a proposition which demonstrates tangible progression and the probability of success can produce even better business and client outcomes.”