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Improving Client Experience Pivotal to Practice Growth
SYDNEY, 17 December 2019 State Street Global Advisors, the asset management business of State Street Corporation (NYSE: STT) today issued a new report revealing alternative ways for Australian financial advisers to grow their practices in 2020.
The Model Portfolio Solutions and the Client Experience Report and associated research, shows Australian financial advisers’ top priorities include acquiring more clients and deepening client relationships.
For advisers around the world, earning and maintaining client trust was the biggest challenge to growing their practices. However, this was of greatest concern to Australian advisers (34 per cent), following more than a year of industry scrutiny.
Despite their goals to deepen relationships and acquire more clients, advisers currently spend more time on portfolio management (23 per cent) than on either client-facing activity (15 per cent) or prospecting new clients (11 per cent). Day-to-day pressures such as time management were also identified as a challenge for achieving goals for one in five Australian advisers. According to the report, the most prominent reason was fulfilling compliance and regulatory requirements.
State Street Global Advisors Head of Practice Management Brie Williams said outsourcing portfolio management could help advisers who place such a high value on bespoke services.
“Outsourcing investment management may sound counterintuitive, but as financial advice continues to face pressure from changing client expectations and increased regulatory requirements, the need for economies of scale continues to grow,” she said.
“As assets grow, finding the time to serve clients and attract new business can get even harder.
“Outsourcing some aspects of investment management such as using model portfolios, increases operational efficiency and can save advisers time. Instead, they can focus on building relationships with their clients and prospecting for new ones.
“It does not mean opting out of investment responsibilities. Advisers still go through a rigorous process in selecting investments that suit each client’s circumstance. Outsourcing can give advisors more time and flexibility, because they’re free from initial portfolio construction and ongoing trading and rebalancing responsibilities.
“I have heard firsthand that advisers worry outsourcing investment management to a third-party money manager will make the client experience less personalised. However, investors with assets in model portfolios feel better about their adviser relationship and are actually more satisfied with the wealth management experience. This is because clients with assets in model portfolios usually receive more services from their advisers than clients of advisers not using model portfolios. Adviser value is better measured by the impact their services can have on investors’ financial outcomes,” Ms Williams said.
More than 1,600 financial advisers and investors in Australia, Japan, the U.S and UK took part in the research conducted by State Street Global Advisors SPDR ETFs.
Issued by State Street Global Advisors, Australia Services Limited (AFSL Number 274900, ABN 16 108 671 441) ("SSGA, ASL"). Registered office: Level 14, 420 George Street, Sydney, NSW 2000, Australia · Telephone: 612 9240-7600 · Web: www.ssga.com.
State Street Global Advisors, Australia Services Limited (ASL) (AFSL Number 274900, ABN 16 108 671 441) is the issuer of interests and the Responsible Entity for the ETFs which are Australian registered managed investment schemes quoted on the AQUA market of the ASX or listed on the ASX. This material is general information only and does not take into account your individual objectives, financial situation or needs and you should consider whether it is appropriate for you. You should seek professional advice and consider the product disclosure document, available at www.ssga.com/au, before deciding whether to acquire or continue to hold units in an ETF. This material should not be considered a solicitation to buy or sell a security. ETFs trade like stocks, are subject to investment risk, fluctuate in market value and may trade at prices above or below the ETF's net asset value. ETFs typically invest by sampling an index, holding a range of securities that, in the aggregate, approximates the full index in terms of key risk factors and other characteristics. This may cause the fund to experience tracking errors relative to performance of the index. Investing involves risk including the risk of loss of principal. Diversification does not ensure a profit or guarantee against loss. Holdings and sectors shown are as of the date indicated and are subject to change. This information should not be considered a recommendation to invest in a particular sector or to buy or sell any security shown. It is not known whether the sectors or securities shown will be profitable in the future. Sector ETF products are also subject to sector risk and non-diversification risk, which generally results in greater price fluctuations than the overall market. SPDR and Standard & Poor's® S&P® indices are trademarks of Standard & Poor's Financial Services LLC and have been licensed for use by State Street Corporation. The Dow Jones Global Select Real Estate Securities Index is a product of S&P Dow Jones Indices LLC and has been licensed for use by State Street Global Advisors, ASL. MSCI indices, the property of MSCI, Inc. ("MSCI"), and ASX®, a registered trademark of ASX Operations Pty Limited, have been licensed for use by State Street Global Advisors, ASL. SPDR products are not sponsored, endorsed, sold or promoted by any of these entities and none of these entities bear any liability with respect to the ETFs or make any representation, warranty or condition regarding the advisability of buying, selling or holding units in the ETFs issued by State Street Global Advisors, ASL. State Street Global Advisors Trust Company (ARBN 619 273 817) is the trustee of, and the issuer of interests in, the SPDR® S&P 500® ETF Trust, an ETF registered with the United States Securities and Exchange Commission under the Investment Company Act of 1940 and principally listed and traded on NYSE Arca, Inc. under the symbol "SPY". State Street Global Advisors, ASL is the AQUA Product Issuer for the CHESS Depositary Interests (or "CDIs") which have been created over units in SPY and are quoted on the AQUA market of the ASX. The whole or any part of this work may not be reproduced, copied or transmitted or any of its contents disclosed to third parties without State Street Global Advisors, ASL's express written consent.