Financial advisers are reporting an increase in requests for advice from clients, with a large proportion coming from those who are new to advice, in response to the COVID-19 pandemic, according to a financial services consulting firm.
NMG Consulting stated it had found advisers surveyed in a recent poll reported a 35 per cent jump in inbound client contacts, of which around 20 per cent were from clients who were new to financial advice.
The firm today told selfmanagedsuper the poll was part of a wider survey project, but in this instance it received responses from 100 advisers, including non-aligned, aligned and salaried advisers.
Non-aligned and aligned advisers reported their proportion of inbound contacts from new clients was 21.6 per cent and 19.7 per cent respectively, while salaried advisers only reported 4.2 per cent of calls coming from new advice contacts.
Commenting on the poll via a blog on the firm’s website, NMG director Nickola Cable said: “There are some important lessons to be drawn from this, not least of which is that in times of crisis, people seek comfort in large, well-known institutions.
“Despite all the brand damage of the past 18 months, when thinking about who to call, customers who had never seen an adviser before sought out both IFA (independent financial advisers) and aligned advisers.”
Cable also pointed out asset managers were currently considered by advisers as the leaders in providing support in acquiring and retaining clients during the COVID-19 lockdown period and its ongoing effects, ahead of licensees and platform providers.
“So far, dealer groups are underperforming other service providers when it comes to helping advisers deal with the events related to the coronavirus,” she said, with the survey indicating 52 per cent of advisers considered their licensee to be ‘helpful’ in the current circumstances, while 21 per cent considered them ‘unhelpful’.
In comparison, platform providers were considered to be ‘helpful’ by 70 per cent of advisers, but ‘unhelpful’ by 27 per cent, while asset managers were considered ‘helpful’ by 84 per cent of advisers and ‘unhelpful’ by only 8 per cent.
Cable said service providers, including licensees, should follow the lead of asset managers in the style, frequency and content of their communications and support for advisers.
“When we asked advisers who was communicating well, four of the top five most mentioned firms were asset managers and the thing they were most commonly cited as doing well was providing regular, objective, succinct thought leadership and commentary,” she said.
Advisers were also concerned about managing their businesses, with the poll finding 38 per cent of surveyed advisers had serious concerns about their business, with 32 per cent having slight concerns, while the remainder were unconcerned.
Cable said practice efficiency and tools to run a business “are firmly within the bailiwick of platforms and dealer groups and there is clearly an opportunity to fill the gap in support in that area”.
These figures have also been reflected in research released by non-aligned advice group Centrepoint Alliance, which found around one in three advisers responding to a survey within the group were taking action to shore up their businesses and advice practices during the COVID-19 downturn.
The group stated that of the 177 authorised representatives and self-licensed advisers who responded to the survey, 33 per cent were focusing on how their practices would survive over the medium to long term.
Centrepoint Alliance chief executive Angus Benbow said: “The majority of financial advisers are small business owners, so many are focused on ensuring their businesses remain viable and sustainable beyond the current period of market uncertainty.
“At the same time, they are focused on doing crucial work to support clients, many of whom have lost their jobs, or are experiencing financial distress or cash-flow issues.
“In this environment the value of quality financial advice has never been greater. Advisers are working to adapt their businesses and overcome the challenges of mandatory social distancing to help their clients through this period.”
Centrepoint Alliance noted the reason for the focus on long-term business survival was that 93 per cent of those surveyed during the first week of April also expected Australia to enter into recession despite the federal government’s stimulus packages.
ASIC also recently relaxed the conditions around the provision of advice for financial planners and advisers, accountants and tax agents with support from five professional bodies representing advice practitioners.
