Advice / Advisers / Licensees / Practice

Licensees grapple with how to keep advisers feeling valued

There are still a few weeks left in 2020, but it’s safe to say already that this year has been one of the most challenging in living memory. As if the impact of new education standards wasn’t already enough, there has obviously also been the effects of the COVID-19 pandemic to deal with.

In the midst of all this, CoreData undertook its annual Licensee Research. The 2020 results reflect advisers’ mindsets right in the midst of the upheaval, uncertainty and disruption caused by the pandemic – on themselves and their families, on their businesses and staff, and on their clients.

There has never been a more important time for licensees to step up and support the advisers in their networks, to make sure they’re feeling valued and that their needs are being met, and to demonstrate a commitment to advisers and to the industry.

As part of the Licensee Research we asked advisers to tell us how they felt about exactly those issues, and a few more things besides. As with all of the industry-level results this year, the reported experiences of advisers in institutionally branded licensees has dragged down the overall industry average. Even so, we can still see some differences between independently owned licensee and institutionally affiliated licensees.

Click on the chart to enlarge

Overall, advisers are reasonably confident that their licensees are committed to the advice industry. Even among advisers in institutionally branded licensees almost half (47.6 per cent) say their licensee is committed, though this figure is well below the proportion of advisers authorised by independently owned licensees (97.6 per cent) and institutionally affiliated licensees (87.2 per cent).

And more than eight in 10 (82.1 per cent) advisers in independently owned licensees say they are loyal to their licensees, compared to almost eight in 10 (76.9 per cent) advisers in institutionally branded licensees.

The accompanying charts illustrate how advisers feel, across licensee segments, on a range of issues relating to their licensees.

Physical events postponed or cancelled

It’s been a difficult time for licensees to really demonstrate how much they value their advisers because many of the community-based activities a licensee would typically have facilitated during the year simply haven’t been possible. A survey of licensees by CoreData earlier this year revealed that more than two-thirds (68.4 percent) have cancelled physical professional development days and conferences this year. Just under half have rescheduled PD days, and more than eight in 10 (84.2 per cent) have rescheduled a conference.

It’s generally been easier to convert physical PD days to virtual events than it has been to convert conferences, with almost 95 per cent of licensees converting PD days but only a few (15.8 per cent) converting conferences to virtual events. Licensees have sought to help advisers in other ways, too, with around one-third extending fee relief to advisers (waiving, on average, just under half the annual licensee fee).

As a general observation, financial advice firms and licensees had adapted superbly to the changed working environment of 2020. The intelligent use of technology and the industry’s trademark resilience and adaptability have combined to support ongoing client interactions and interactions between licensees and advisers. Some of these ways of working will be part of the business environment for years to come. But there’s no substitute for face-to-face contact, and good old fashioned human interaction.

As borders begin to re-open and as social distancing and other COVID-19-related restrictions hopefully begin to ease in the new year, a degree of normality will begin to creep back into adviser-licensee relationships. It will present an opportunity for licensees to make up for lost time, reinstating conferences and PD days and bringing advisers together again to discuss the challenges and how to overcome them, and the undoubted opportunities that lie ahead for financial advice, and how to capitalise on them.

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