Advisers have been warned of "highly disparate" levels of service after it emerged a quarter of clients claimed they had not heard from their adviser during the recent market downturn.
The latest advice report published by researcher Boring Money found satisfaction levels remained high among advised clients, with 90 per cent saying they were pleased with their adviser, but levels of service were not equal across the market.
The report included a survey of 6,520 adults, an online survey of 2,000 fund investors and detailed insights from 316 investors who either invest through a DIY platform or have a financial adviser.
It found only 9 per cent of British adults had a financial adviser, with half of those that did aged over 65 years old.
Of the advised customers 26 per cent claimed they had not been contacted by their adviser since the coronavirus lockdown began in March, including during the significant market downturn of recent months.
Holly Mackay, managing director of Boring Money, warned the results were a "tale of two cities".
She said: "There are firms which have embraced technology and got clients set up online, able to see valuations, make top-ups and access content - and there are those which are still largely paper-based.
"If you are a client getting valuations from a quarterly paper statement, this exacerbates the sudden shock and also keeps you out of the loop on any recovery.
"Nerves will be on edge and you will need reassurance. Obviously there will be more demand for phone calls and contact from these customers."
Markets endured weeks of turmoil in March as countries closed borders and imposed lockdowns in a bid to stop the spread of the coronavirus and curb its death toll.
If you are a client getting valuations from a quarterly paper statement, this exacerbates the sudden shock and also keeps you out of the loop on any recoveryHolly MackayMs Mackay warned those who had not received any contact may be questioning the value they get from advice, with some clients reporting their adviser had not sent a single email during the downturn.
Ms Mackay added: "I think it’s also really important to reiterate what people value from their financial adviser. It’s not technical stuff or trailblazing modelling or amazingly clever portfolio management.
"It’s trust, communication and engagement, reassurance and dialogue."
Under normal circumstances rules under Mifid II require advisers to inform a client, before the end of that business day, if their portfolio has dropped by 10 per cent or more compared to its valuation at the beginning of the quarterly reporting period.
But the FCA moved to relax this requirement in April by allowing a more flexible approach until later this year, in response to warnings the rule was adding to "workload pressure and anxiety" in a market hit hard by the coronavirus pandemic.
One advised client told Boring Money they had requested specific advice from their adviser in a face-to-face meeting at the beginning of March, and had not heard anything since.
Whilst clients may not walk away during this period, if you haven’t looked after them then there is high probability they will leave as soon as they are ableMartin BrownAnother client said they intended to challenge their adviser as to why they had not been in touch during the market turbulence.
Of the advised investors surveyed by Boring Money, 23 per cent said their expectations of advisers had changed with a higher focus on personalised communications and regular updates.
Ms Mackay added: "Interestingly, customer appetite and acceptance of video calls has increased and now 63 per cent of advised clients say that they would be happy to engage with their adviser this way."
Martin Brown, managing partner at Continuum, warned if advisers were not in constant communication with their clients they risked losing them.
Mr Brown said: "We have seen a significant inflow of leads from clients that haven’t had any contact with their adviser.
"Additionally, the advisers of course leave themselves potentially open to complaints as they could be seen as not carrying out the service for which they are paid.
"Clients have been very vulnerable over the last couple of months and it is potentially business suicide to not be in contact during these times.
"Whilst clients may not walk away during this period, if you haven’t looked after them then there is high probability they will leave as soon as they are able."
rachel.mortimer@ft.com
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