Press Release

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.