How can advisers deliver more value for existing clients?

While conversations around attracting new clients are somewhat commonplace, the latest report from Netwealth – Creating loyalty that lasts – revealed that 17 per cent of those who recently left their adviser attributed the decision to not receiving value from their adviser.

Exploring how this can be addressed, the report found that getting advice that is tailored to their specific needs is, of course, important for all clients. However, the report showed that while 60 per cent of newcomers valued this, it tends to increase over time to 74 per cent for loyal clients.

“When advisers use goal-based planning and provide a picture of how future goals can be met, these future rewards become more immediate, concrete and valuable. This can create positive psychological value, or even pleasure from anticipating a future positive event or goal,” the report said.

“Clients derive value not just from the eventual reward but also from the process of waiting for it (also known as ‘anticipatory utility’). Goal-based advice helps create excitement in looking forward to something, contributing to overall satisfaction even before it happens.”

Furthermore, long-term clients thought it was considerably more important that their adviser not only valued their suggestions but also acted on them (48 per cent).

One way Netwealth suggested addressing this desire for goals-based advice is by taking a more collaborative approach, actively involving the clients while co-creating their financial plan by offering them options, explaining the merits of each and then letting them choose.

On top of this, the report found that, over time, the percentage of clients valuing their advisers’ recognition of their preferences when investing increases over time, starting out at 49 per cent of newcomers, indicating that this is important, then jumping 10 per cent among loyal clients to 59 per cent.

Notably, the value placed on prioritising ethical or responsible investing starts out at 51 per cent for new clients then spikes slightly among settled clients (57 per cent) and then drops considerably to just 43 per cent for loyal clients.

While this might suggest that advisers don’t need to be overly concerned about a client’s ethics when choosing investment options, the report suggested that advisers need to at least keep this in the back of their minds, particularly in the earlier years of a client relationship.

“Aligning investment advice with a client’s personal beliefs taps into the powerful psychological principle of ‘identity alignment’. This means people engage more with things that reflect their own sense of identity. Recognising a person’s core values deepens the two-way connection,” Netwealth said.

Making clients’ lives easier

Now, as technology creeps into every facet of daily life, newer clients are really valuing the ability to view and access their portfolios through their phone or via an app.

In fact, more than half (55 per cent) of newcomers think this is an important part of their adviser’s offering. However, this does drop off markedly for longer-term clients, with only 38 per cent of loyals considering this an important factor, which could be attributed, at least in part, to the likely age demographic among the groups.

Likewise, newer clients appear to crave more independence, placing a higher value on self-service options (47 per cent) and access to real-time portfolio updates and trackers (45 per cent) than more established clients.

On the other hand, having a streamlined process and paperwork almost doubles in importance over time, jumping from just 36 per cent at the start of an advice relationship to 64 per cent.

Offering rewards or additional benefits is also of considerable value, particularly among newer clients, with 51 per cent thinking it is important that their adviser offers incentives, benefits or discounts for referrals.

On top of this, 47 per cent value exclusive client benefits, increasing over time to 56 per cent for loyal clients, while the value placed on loyalty incentives, such as reduced fees for long-standing clients, remains relatively stable across all groups, ranging from 53 per cent to 56 per cent.