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Advisers need to uncover origin of disengagement

Advisers looking to service SMSF clients need to understand why these individuals are not engaged in the financial advice process before they can expect to make any progress to this end, according to the head of the Association of Financial Advisers (AFA).

“When trying to answer the question of how financial planners get SMSF members to re-engage or engage with an adviser, we’ve got to look at why they haven’t been engaged already. We know only two out of 10 people get advice, so whether they had an adviser and perhaps weren’t happy with that and then became self-advisers or they’ve never had advice, we don’t know,” AFA chief executive Brad Fox told a recent SMSF forum hosted by platform provider Wealthtrac.

“But if we want to engage people with advice, it goes back to the absolute basics about an advice client relationship.”

Fox said having soft skills in this process was more important than ever to help establish trust with the client.

In addition, he said he believed it needed to be communicated to SMSF trustees that running a fund was not necessarily a task that could be performed without assistance, especially during the investment process.

“Very few people are adequately skilled to be their own investment adviser because they can’t divorce themselves from the emotion of their decision making,” he said.

“We all benefit from having a mentor. In your career you benefit from having a mentor. As a sports participant you benefit from having a coach and a mentor.

“Very few people do this role on their own. They need the support to be able to do it.”

He went on to say he thought most SMSF trustees had not written down or perhaps even considered four critical issues: how they are going to invest, are their assets protected, how the administration will be performed, and how the decisions governing the fund will be made.

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