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Satisfaction rises, but plannersí client pool shrinks

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Client retention remains a key issue for financial planners, despite actions to improve satisfaction rates and rising demand for advice, according to market researcher Investment Trends.

Senior Analyst King Loong Choi says there are 2.2 million active clients nationwide, down 25% from 3 million in 2007, with planners typically losing three for every two they gain.

Steps to improve retention contributed to a record 55% of clients this year being “very satisfied” with their planner, up from 45% last year, according to Investment Trends’ Financial Advice Report.

“Keeping clients well informed on their progress towards achieving their goals is key to enhancing perceptions of value and, in turn, improving client retention further,” Mr Choi said.

The amount Australian are willing to pay for advice averages $750, while planners’ estimate the delivery cost at an average of $2500.

“The majority of potential planner clients are open to a range of cost-saving options, ranging from filling in an online fact-find prior to initial consultation to non-face-to-face review meetings,” Mr Choi said.

“In fact, more than nine in 10 potential planner clients are open to conducting review meetings with someone other than their planner if it meant a reduction in fees.”

The research estimates 3 million Australians intend to engage a financial planner in the next two years, up from 2.6 million last year and double the number observed in 2013.

The top unmet advice needs centre around retirement planning and budgeting.

The report draws on a survey of 9552 people conducted in July.