Client Survey: The most important factor in choosing a fee-only advisor

Published: July 31, 2023 at 6:00 am

We recently ran a survey for clients of fee-only advisors who are part of Freefincal’s curated list and fee-only India – 964 clients have participated.

A healthy trend has emerged that warrants our attention, and we strongly believe any further response would only strengthen it. We shall discuss answers to two survey questions in this article. Other questions will be discussed in subsequent articles.

Question: What are the factors that helped you finalize your decision? Choose as many as relevant

Options:

  • Advisor’s education/qualifications
  • Advisors experience
  • Fees
  • Advisors’ articles or social media posts, or comments
  • Recommendation by a friend or relative
  • Recommendations on social media
  • Recommendation by Ashal Jauhari
  • The advisor spoke in my mother tongue
  • The advisor lives in my city
  • The introductory call with the adviser
  • My expectations matched the adviser’s style of advice

Result:


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Fee-only advisor's client survey results: What are the factors that helped you finalize your decision
Fee-only advisor’s client survey results: What are the factors that helped you finalize your decision

Notice that the advisor living in the same city as the client is largely irrelevant! Which is fantastic! Fee-only advisory is essentially an online business. Most clients are mature enough to appreciate it.

Advisor speaking in clients’ mother tongue is also surprisingly a small factor. This means most of the clients are comfortable with English.

Advisor experience is the most important factor, as is the case before engaging any professional like a doctor, CA, lawyer etc.

“My expectations matched the adviser’s style of advice”, a factor suggested by SEBI RIA Swanpil Kendhe, comes in second and outranks “Advisor’s education/qualifications” and “Fees”. “The introductory call with the adviser” is related to expectation-advisory style overlap.

These results show that clients are largely erudite with some basic understanding of the financial planning process.

The nearly 35% share of “Advisors’ articles or social media posts, or comments” and the expectation-advisory style match offers a bright ray of hope for new/young advisors to compete with older/experienced advisors.

New advisors must have crystal clear clarity on their financial planning process and style of operation. They must consistently showcase their competence via articles and videos in different fora but primarily on their own website. Those looking for assistance in going about this can consider our course: Increase your income by getting people to pay for your skills!

Next, we asked: “If you had to choose ONE option (among the above) as the most important before choosing an advisor.”

Results:

Feeonly advisor survey result: If you had to choose ONE option as the most important before choosing an advisor it is
If you had to choose ONE option as the most important before choosing an advisor, it is

It is fascinating that the advisor experience and “My expectations matched the adviser’s style of advice” are now on par! Good reviews and recommendations by another client come in next. Fees and qualifications are not as important!

In summary, the survey results show that the typical client of a fee-only advisor is fairly knowledgeable and does not choose advisors based on fee, location, or language. Wavelength match with the advisor and advisors’ experience are the key factors.

The future of fee-only advisory in India is quite bright, and clients are willing to take a chance with a new advisor if she can impress them. More power to both parties!

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Pattabiraman editor freefincalDr. M. Pattabiraman(PhD) is the founder, managing editor and primary author of freefincal. He is an associate professor at the Indian Institute of Technology, Madras. He has over ten years of experience publishing news analysis, research and financial product development. Connect with him via Twitter, Linkedin, or YouTube. Pattabiraman has co-authored three print books: (1) You can be rich too with goal-based investing (CNBC TV18) for DIY investors. (2) Gamechanger for young earners. (3) Chinchu Gets a Superpower! for kids. He has also written seven other free e-books on various money management topics. He is a patron and co-founder of “Fee-only India,” an organisation promoting unbiased, commission-free investment advice.
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