CoreData has just completed its 2020 Licensee Research and it’s thrown up some interesting insights into how financial advisers view their licensees and the services they provide.
Overall, advisers’ satisfaction with their licensees is higher this year than it was last year, but it’s still not back to the levels it was when we did this research in 2018.
We look at a range of elements of the licensee offer and we also look at a number of individual components of each of those elements.
At a top level, advisers’ satisfaction with their licensees’ service is higher for all elements except one – adviser technology.
When we look at the components of this element more deeply we find that advisers’ satisfaction is slightly lower this year than it was last year. And this is the only major service element where that’s the case.
Otherwise, it seems that after a drop-off in 2019, licensees have generally lifted their game, and advisers are responding positively.
But why does adviser satisfaction even matter?
Well, in a world where licensee fees were declining, or were still being subsidised by products, or other sources, it might be less of a big deal.
But subsidies are being removed from the system, licensees are having to cover the costs of servicing advisers, and so generally, licensee fees are on the rise.
Across the industry, two-thirds of advisers say they are paying more to their licensee this year than they were last year.
The average fee in 2020 is almost $38,600 per Authorised Representative.
But there’s a wide range. The highest figure in this year’s research is $85,000, but some advisers are still paying $20,000 a year, or less.
Where fees are rising, licensees are under increasing pressure to prove their worth to advisers, and advisers are understandably starting to question the value they get.
Where a fee isn’t reflective of the cost to serve, advisers might start questioning the long-term viability of their licensee or start to wonder where the fee is being subsidised from.
CoreData’s Licensee Research gives licensees the insights they need to assess what their advisers think about how their offer and how it stacks up compared to what other advisers, in other licensees, think about theirs.
By doing this research and working with licensees who want to improve their service, we aim to help improve the quality – and the pricing – of services to all advisers.
If you would like to know more about the work CoreData is doing with licensees and financial advice firms, please give us a call.
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