Back to all stories

62% of wealth management clients in Australia think their Financial Adviser would walk past them in the street without recognising them.

That is one of the less positive insights to come out of the Salesforce Industries Connected Investor Report. Financial Services organisations are going through a trust crisis. Whilst a lot of this is reserved for the banks, Wealth Management as a sub-sector has also had its own share of issues over the years. Despite ever increasing regulation, 58% of clients said they still don’t trust their adviser to have their best interests at heart when providing advice.

It’s not all bad though; in this post we’ll take you through 3 of the key insights that came out of the report as we look forward towards the future of Australian Wealth Management.

First Insight - People Want Advice

People may be used to finding their own answers to questions and even diagnosing their medical problems using Google, but when it comes to advice on their finances the majority confirmed that they wanted to speak to a professional.

In Australia, 84% of people surveyed confirmed they wanted to work with an adviser, however only 43% currently do get advice.

The key being that they don’t want advice in the format it has traditionally been offered: the “Give me your money and I’ll manage it for you” model.

Traditionally clients have two choices: hand over your money to someone who manages it for you, or manage it yourself.  Our research showed that a middle ground was emerging, where clients want to have a say and some control over financial and investment decisions, but they want input from a professional to ensure they’re on the right track.  

We call this “collaborative advice”, where communication flows between client and adviser not just at quarterly reviews, but at any time and through any channel.  Clients are involved in investment decisions and the process of deciding the most appropriate vehicles for attaining their goals. 60% of people surveyed want “collaborative advice”.

The main drawback of this approach, of course, is the time and effort required to deliver collaborative advice.  How can the modern adviser deliver this advice, at scale?

Second Insight - Clients want modern tools/technology

Financial Services as a whole has lagged behind other industries when it comes to the adoption of new technologies.  It’s an industry that’s ripe for disruption, a fact validated by the emergence of companies like Harmoney, Prospa, eWay and StockSpot, who are gradually taking market share out of key sub-sectors.

If it's possible to order a taxi or a pizza and then track its location using GPS on a phone, why is it so hard for a client to see a holistic view of their finances online, or update financial goals and track progress in an app?

After fees and convenience, the two most important factors clients consider when choosing an adviser are technology related. 80% of clients want their adviser to be able to provide them with a holistic view of their accounts and financial history and 71% want modern financial planning tools.

This is in stark contrast to the current status quo. When asked how they currently kept track of their financial records, only 1 in 5 had access to an online portal where they could view all their accounts. By far the most popular method of storage was in a shoebox or equivalent.

In a time where people are used to being able to access any data at any time right from their phone, how can an adviser compete with the largest institutions to provide the necessary tools that millennials expect?

Third Insight - Advisers must develop relationships into the extended family NOW!

An Accenture report* last year identified that US$30 trillion is set to pass from one generation to the next over the coming 20 years. Australian advisers need to assess the strength of relationship they have with their clients’ extended family to protect their business against this mass transfer of assets.

Only 26% of those clients surveyed said that their financial adviser knew their family and 62% actually felt as though they could walk past their adviser in street and they wouldn’t recognise them. Furthermore, a Deloitte report** found that when a client passes away, 9 times out of 10 the recipients of the inheritance will switch adviser. Now more than ever, it is essential that advisers proactively build relationships with the spouses, children and extended family of their clients.

With so many conflicting priorities vying for an adviser’s time, how can the modern adviser ensure that they are tracking extended client relationships and building bridges to the other members of the family.

Clients expect a highly personalised experience. Through social media and access to information, they’ve been conditioned to expect instant feedback and answers to their queries. The traditional financial planning model isn’t set up for rapid response and always available information.  Financial Advisers provide a highly tailored, high touch, relationship-based experience that has produced high levels of satisfaction, as high as 88% satisfaction in some groups, but it’s not scalable.

In order to provide the high touch, always available, levels of service that millennials expect, at scale, the only answer is technology.  

Those clients that currently delegate all management of their finances to an adviser will continue to do so. There is, however, a new breed of client emerging that wants to make their own decisions, in collaboration with a professional, that expects technology as an integral part of the client/adviser relationship. Those advisers that are able to embrace the changing needs of their clients, and evolve to meet their demanding requirements, will be best positioned to take the spoils.

Given the challenges ahead, Salesforce released the Financial Services Cloud, a pre-configured application specifically for financial planners. However they choose to tackle the changing landscape, financial advisers need to be ready for a new breed of client with higher levels of expectations if they are going to continue to succeed.

If you would like to find out more information on Financial Services Cloud, click here.

*Accenture, “Listening to the Voice of the Adviser”, 2015

**Deloitte, “10 Disruptive Trends in Wealth Management”, 2015