Australia's financial planning sector has lost sight of the importance of client relationships by focusing too intently on the technical aspects of the profession, an industry association chief has said.
Association of Financial Advisers (AFA) chief executive Richard Klipin said as an industry, financial planners have become too reliant on providing clients with technical or definitional information rather than focusing on a back to basics client relationship.
"We've become really good as an industry at 'talking technical' to people," Klipin told an AFA adviser briefing yesterday.
"This tactical stuff is where I reckon we've gotten sucked in as an industry and that's why consumers are saying 'we don't get what you're on about.'"
Klipin quoted results from an AFA advice survey by Brandmanagement/CoreData that found Australia's advice industry had missed a big opportunity among Australian investors.
"In terms of people who use advice, 40.9 per cent of people have never used an adviser, 27 per cent have in the past and don't now, and only 17 per cent actually have an advice relationship right now," he said.
"How big is this opportunity? How poor have we been at communicating to the broader community? There is the evidence about what people are not doing and it's not about fees only.
"I would argue that it's about our inability as an industry to communicate the essence, in a really simple way, as to why you would engage with an adviser."
Klipin said consumers are seeking a conversation that is "to them, about them, in their language and in their timeframe".
"It's not about you, it's not about us - it's about them. I think that's a critical piece."
