I’ve never paid for financial advice. Sure, I’m open to it, but like many women my cash flow priorities have just been elsewhere.
But as the clock gets ticking, the kids get older, and the Australian property market looks questionable, there are three things I’m looking for to help me justify my spend on advice.
• Value-for-money financial advice. Real help on my personal financial situation and investments
• This is information that I can’t get elsewhere and;
• A bit of handholding through the journey (I like to ask a lot of questions).
Trends suggest that we could start to see more women engage in some form of financial advice - given a record number of women in the Australian workforce and a greater focus on closing gender gaps in pay and retirement savings.
What this will cost is always likely to be an issue and the new challenge for financial advisers is how to manage that.
Jade Financial Group managing director Dianne Charman says when it comes to spending money, people want quality and this applies especially to women.
“Women are well known to pay for quality. If they don’t see quality in a relationship and see that in the long-term, they won’t pay.
“Finding the person they want to give their money to is the trick.”
What I know about paying for financial advice is that the amount I pay will most likely increase depending on how I receive that advice.
So cost may well be free for general advice through my super fund for a phone or video chat, and increase as I engage with an adviser face-to-face.
The research tells us that cost is generally determined by a:
• Time-based, fee-for-service arrangement, or
• An asset-based fee, calculated as a percentage of the amount you invest through them.
While this is clear enough, it doesn’t help me really understand what I might be up for in dollar-terms.
What’s important to me is how well advisers are able to communicate how they are paid and whether they are willing to work with people on price and payment.
One tip recommended by some financial advisers when communicating on costs is to break the fees down to instalments and make them relative to what someone might already be spending, say for example that advice is costing me a lunch out one day a week.
Mindful Wealth financial wellbeing coach Lea Schodel says she likes the concept of a coaching style advice process with regular fees, perhaps even a minimum fee agreement or term.
And whilst there may need to be a slightly higher fee upfront to cover time, it could then convert to regular monthly instalments.
“I think we need to be more flexible on payment terms and arrangements. If financing your fee over a number of payments makes it more accessible to your clients, then offer that,” she says.
Research suggests that women are more likely to be cautious investors than men, are more likely to invest for the long-term and will often seek the advice of trusted family and friends on key decisions.
Women can also be very loyal customers.
I’ll also admit that if I find a quality professional, service, business or brand, I’m more likely to stick with it, and less likely to change just because a competitor is cheaper elsewhere.
But in an environment where trust and integrity in financial advice is being questioned after the Royal Commission, financial planners may find they’ll be working harder than ever before.
This makes being transparent and upfront about the costs of financial advice critical.
The way these costs are explained helps people see the value in the service they are being provided.
“There are many options on how clients can pay for advice and exploring those for women is really important,” says Ms Charman.
“Don’t brush off concerns on costs – be realistic and offer options for payment
“Make sure you offer value and that will appeal.
“If you can partner with your client to build their financial success through education and empowerment you will definitely appeal to female clients,” says Ms Charman
Bianca Hartge-Hazelman is the founder of the Financy Women’s Index, of which OneVue is a sponsor. Get the latest from Financy by following their Twitter channel here.
The opinions expressed in this content are those of the author shown, and do not necessarily represent those of No More Practice Education Pty Ltd or its related entities. All content is intended for a professional financial adviser audience only and does not constitute financial advice. To view our full terms and conditions, click here.
As various industries look to improving gender diversity, we explore th....
Australian women have a bit of a thing for owning residential property and ....
13 December, 2018
As various industries look to improving gender diversity, we explore the steps financial planners can take.
06 December, 2018
29 November, 2018
The federal government has released its Women’s Economic Security Statement, so what do financial planners need to know?