Financial services companies should not look to slash their fees in hope that it will increase their competitiveness, according to Fiducian.
Clients are most interested in quality of advice,Fiducian managing director Indy Singh told InvestorDaily.
“Slashing fees won’t make you competitive at all,” Singh said.
“Clients want a service, good advice, good support and monitoring, and an active financial planner who looks after their business.
“They are willing to pay the money for that.”
Despite a recent Investment Trends report about the amount that clients are prepared to pay for their financial advice, clients still see that quality of advice is more important than cost, he said.
“Just by slashing your fees doesn’t mean people will come to you because those who want to slash fees and the clients who are willing to go to people who have slashed their fees are obviously not willing to pay for a service of quality,” he said.
“They are the ones who suffer in the end.”
The Investment Trends 2011 Advice and Limited Advice report showed that the amount that Australians are prepared to pay for financial advice has fallen owing to pressure on fees from the global financial crisis.
The trend was expected to continue while the cost pressure showed no sign of easing, the report said.
But Investment Trends senior analyst Recep Peker told InvestorDaily at the time that although Australians are less satisfied with the fees they are paying, their satisfaction in terms of value for money for that advice has not changed.
Singh explained financial services companies should not reduce their fees in response to these findings because quality is still highly valued.
