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Initial client feedback
We tested the consumer response to the digital SoA with some qualitative research undertaken by CoreData. This involved a focus group discussion with eight real consumers of advice; everyday adult Australians who have had some experience with advice in the past or are currently accessing the services of a financial planner.
The first real insight from the research was that advice is more intimidating than ever. With the revelations of the Hayne Royal Commission still fresh, consumers are cautious of advisers, even cynical. They believe that financial decisions can have a lifelong impact, so they should not be taken lightly.
They’re also uncomfortably aware of the power imbalance between themselves and their adviser. Financial planners know more about this stuff than them. They’d overcome this information asymmetry by reading broadly, speaking to others and then really delving into the detail and fine-print of the SoA.
We created a baseline for consumer feedback on the digital SoA by first showing them a paper SoA constructed in accordance with the example in ASIC Regulatory Guide 90 – Example Statement of Advice: Scaled advice for a new client. Interestingly, the response to this example document was mostly positive.
Consumers think it’s logically structured, clear and transparent. But they don’t really think it’s geared to improving financial decisions. They think it’s a document designed by the planner for the purpose of self-preservation.
Clearly, that perception is a barrier to a trusted relationship. A belief that the other party in a relationship is benevolent and genuinely has your interests at heart is a keystone to a high trust relationship.
The good news? The digital SoA overcomes this barrier. But it’s not really about the output. In fact, most focus group participants said that they’d still print out the digital SoA. It’s about the process. In particular, the process of co-creation.
The research participants preferred the digital SoA to the paper SoA because it felt less one-sided, more conversational. They think it’s easier to ask questions and inform themselves. It’s more empowering than the paper-based SoA and gives them confidence that they’re more in control of their decisions and outcomes.
And in the end, it’s confidence and a feeling of control that clients are really seeking.
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About this project
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