Where have all the Orphaned Clients gone

Where have all the Orphaned Clients gone

 

Where have all the Orphaned Clients gone?

 

Published LinkedIn 6.4.2022

In July 2021, Money Management published the article Orphaned clients will be ‘off the charts’.

 

The article explains how increasing compliance costs will result in it being uneconomic to service many existing clients.

 

Dealer Groups appear to be telling their advisers to “let go”, clients with a small investment base or have low to average incomes.  These clients are referred to as “Orphaned Clients”.

 

Here is one of many similar comments relating to the article:

 

I have been removing clients for almost 2 years now. I would like to help them, I would like to be there for them, but compliance administration, BID, AFCA, ASIC all mean it is simply too hard for both them and me. I know several have made bad financial decisions since they left us …. but I have followed the ASIC model “Hey – that had nothing to do with me, I concentrate on following the law”.

 

 

The big question is:

 

Where do Orphaned Clients go for Advice?

 

Chances are many of these Orphaned Clients:

 

  1. Seek advice from family and friends with no formal financial advice training or investment experience
  2. Resort to Google to find people or groups who give advice but are not licensed to give advice
  3. Try to do it themselves, using good robo-advice or financial planning products.

 

The long-term loss of clients to alternative sources of advice could have long-term implications.  At what point, is it that the orphaned client is likely to return to the same financial adviser? Probably never!

 

FinTechs have been developing products for Financial Advisers to resolve this problem.  However, many Dealer Groups tend to restrict the products available to their advisers.

 

Financial Mappers is one solution Dealer Groups should consider.  Their advisers can still use the preferred large and expensive platforms such as X-Plan, but at the same time allow their financial advisers to bring in new clients without providing advice or product recommendations.

Watch this video to find out more.

 

financial advisers connecting with clients

 

Glenis Phillips SF FIN – Designer of Financial Mappers

 

 

Disclaimer: Financial Mappers does not have an Australian Financial Services License, does not offer financial planning advice and does not recommend financial products.

I am a founding board member of Plencore Wealth Ltd and Plencore Online Pty Ltd. I am the designer of the product Financial Mappers and Financial Mappers PRO, cloud based modelling software for Personal Finance. This software is sold on the web site www.financialmappers.com.au.I am an educator, investor and expert in both personal finance and mathematical modelling and the author of 'Map Your Finances'.I have both a Graduate Diploma in Applied Finance and Investments and a Diploma in Financial Advising from the Securities Institute of Australia. I also have a Financial Analysis Certificate, by Distance Learning from University of Technology, Sydney. I am a Senior Fellow and Senior Mentor of FINSIA.

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