The future of the financial advice industry

By David Greenslade, Executive Director, Strategi Group

I had the privilege of speaking at the Consilium adviser conference, where I discussed what the financial advice industry might look like in five years and how we can prepare for it. This exclusive event brings together many of New Zealand's top-performing investment advice businesses, all deeply committed to staying ahead of industry trends and optimising their strategies amidst change.

Building on the insights shared at the Consilium adviser conference, this first of a two-part report, explores evolving client expectations—a critical factor in demonstrating FAP (financial advice provider) good conduct. These principles are applicable to all financial advisory businesses.

Brand matters

Clients have traditionally favoured advisers they trust and connect with. Yet, in recent years there’s been a shift towards clients seeking trusted company brands aligned with their values. They have become more aware of engaging with firms that have excellent advisers and are comfortable dealing with a team rather than just one adviser.

To take advantage of this trend, FAPs should consider investing more into their brand and identify if it attracts the right clients. Some market research may need to be done to check alignment. Today, the concept of brand is more than just the logo and name. Does the message on your website go across the entire business in the form of staff you employ, how you deliver financial advice, the quality of your statements of advice, and the service standards you uphold? 

Partnering for reputation

The partners you align with can significantly impact your brand’s reputation. A case in point: during weekends I serve as an adventure tourism auditor for AdventureMark, experts in regulatory certification for adventure tourism operators. These operators, much like those in financial advice, must adhere to legal requirements and validate their compliance through audits. 

In a market with three certification providers, AdventureMark holds the largest share, even though their fees are slightly higher than those of competitors. Operators recognise that AdventureMark elevates their quality reputation, prompting them to invest in AdventureMark certification and proudly display its logo as a symbol of trust and excellence.

Now, take a closer look at your own outsourced providers, such as compliance, training, research, and technology partners. Do these organisations have strong brands that can enhance your own?

Speed and responsiveness

I started my career as a financial adviser in 1989. Back then, it was acceptable to take a week or more to draft a financial plan or schedule a second meeting with clients for discussion. However, as technology evolved, and clients embraced online research and shopping, their expectations for quicker service delivery increased. Think about how swiftly you expect deliveries after online purchases or responses to inquiries on websites and social media. These are the service standards your FAP should adopt.

I often review client focus group findings for financial advisory businesses, and a consistent trend is the expectation of rapid service within 24 hours, whether through phone, text, or email. After any interaction, they also anticipate receiving the statement of advice within 24 hours. This aligns with the modern era, especially if your website emphasises being a forward-thinking, client-centric business that delivers top-quality service through skilled professionals and technology. Clients now naturally expect swift, efficient service.

Next month, we will explore the dynamics of:

• The importance of enhancing your advice presentation;
• Performance as a hygiene factor; and
• Navigating industry trends.

Let us know if you have any questions in the meantime.