With tomorrow being the first anniversary of Consumer Duty, Alex Whitson, Managing Director, VouchedFor, unearths industry benchmarks for value and understanding as he tells us why client feedback can prove to be such a valuable tool.
Directors of most directly authorised firms have spent recent weeks focused on their annual board report, ahead of Wednesday’s deadline.
Evidencing value will be a key part of that, particularly after the fallout from the FCA’s ongoing advice letter to the top 20 firms in February.
Client feedback – as the FCA suggests – can provide firms with qualitative evidence that they’re doing a good job.
Value is inherently subjective, and one of the simplest ways to assess whether clients feel they’re getting value from the service they receive is to ask them.
In recent weeks, we’ve welcomed more than 100 new firms to our enhanced client survey, Elevation. There are now more than 7,000 users (across 405 firms and networks) collecting client feedback through Elevation – including The Private Office, Sandringham, Just Mortgages and Ascot Lloyd.
Using Elevation, we’ve analysed feedback from over 300k clients to unearth industry benchmarks for value and understanding, ahead of the 31st July deadline.
The outlook is positive.
More than 90% of clients rate their experience 4- or 5-star for ‘value for money’ (fig. 1). In fact, only 1.3% of clients give a negative (1- or 2-star) rating.
This should reassure most advice firms – generally speaking, clients are satisfied that they receive good value for money. Where edge cases emerge, it’s a good opportunity to reach out, understand the client’s perspective and put any issues right.
Also positive is the proportion of clients who would recommend their adviser: more than 99% of clients say they would consider recommending their adviser to a family member, friend or colleague (fig. 2).
Firms can take some comfort from this, but in itself, it is not enough to demonstrate value. There is also much room for improvement within most firms by moving more happy clients from happy and saying they’d recommend their adviser, to delighted passionate advocates who regularly do.
Another encouraging sign is the degree of understanding that clients report re: the potential risks of their advisers’ recommendations. More than 97% of clients are confident that they understand the possible disadvantages of the advice they receive. (fig. 3)
This is a key ‘value marker’ – one of nine measured by Elevation – as clients can’t properly assess value if they don’t fully understand the implications of the decisions they’re making.
A year into the Consumer Duty, our data paints an encouraging picture: most clients are achieving good outcomes. Provided advice firms have the right data in place to evidence this and – critically – can show they have a plan to address any gaps, their annual board reports should fare well under FCA scrutiny.
