The surveys advisers send to their clients are “full of regulatory jargon”, with just 10 per cent of clients completing them, according to data from VouchedFor.
Managing director at VouchedFor, Alex Whitson, said many client surveys are “overly ‘complianced’” and that the questions do not make sense to consumers.
“This risks hitting the adviser's consumer duty efforts in two ways,” he explained.
“It drives a lower response rate, which means less valuable management information for their firm, and fails the consumer duty requirement that communication be understandable.”
By carefully testing different question formats and writing in plain English, feedback gathered by VouchedFor from some 250,000 clients averaged a notably higher 45 per cent response rate.
Most people give answers that make their adviser look good…But it's not hugely helpful in getting to what clients really think.Alex Whitson, VouchedForThe portal also found that while almost all clients (99 per cent) say they would consider recommending their adviser, only a third of them (37 per cent) actually go through with it on a regular basis.
Whitson said two of the main reasons for this were the level of communication between an adviser and their client, and a client's understanding of their individual risk - both of which are central to the incoming consumer duty.
“We found that arriving at the right questions to measure something like clarity of communication can be tricky,” said Whitson.
“In part because most people give answers that make their adviser look good. Again, this is encouraging on the one hand. But it's not hugely helpful in getting to what clients really think and driving consumer duty requirements.”
In its survey, VouchedFor used to ask prospective clients 'was the adviser clear about their fees?' to which 89 per cent said ‘yes’.
Asking the right questions to ensure fees are understood - and putting it right when they're not - offers a significant commercial advantage.Alex Whitson, VouchedForWhen the adviser search portal changed the question to 'how do the adviser’s fees work?' and gave simple multiple choice options, only 44 per cent could give an answer.
“Interestingly, when prospective clients are clear how their adviser’s fees work, 51 per cent intend to become clients”, said Whitson.
“This nearly halves to 29 per cent where they are not sure. So, asking the right questions to ensure fees are understood - and putting it right when they're not - offers a significant commercial advantage.
“In summary, client feedback is a key tool in meeting the consumer duty and a departure from a box-ticking approach, by asking the right questions, can unlock significant commercial upside for advice firms.”
Advice firms have been advised by the Financial Conduct Authority to have their consumer duty implementation plans ready by the end of this month, ahead of implementation mid-next year.
ruby.hinchliffe@ft.com
