.... with clients and underpin the fledgling profession crucial to so many stakeholders.
According to research released by the Financial Services Institute of Australasia (Finsia), financial service providers able to develop “professional relationships with customers over a period of time have a distinct advantage over others in positively influencing their perceptions of fairness”.
This would appear to give financial advisers the upper hand in building and nurturing client loyalty.
The Finsia research also highlights a number of areas where improvements could be made to better customers’ perceptions of fairness of their financial services providers.
“Australians are increasingly aware of the need to better manage their money and receiving fair treatment from their credit card providers, bank and financial advisers not only makes sound business sense, but will increase the level of confidence in the industry as a whole,” said Finsia’s chief executive, Russell Thomas.
“Fairness in financial services is defined and measured in a number of different ways and this report provides insights into customers’ perceptions about procedural fairness, interactional fairness and distributive fairness.”
The customer is king
Professor Steve Worthington, from the department of marketing at Monash University, and James Devlin, professor of financial decision-making at Nottingham University, and director of the Financial Services Research Forum, produced the research.
“The results indicate that those financial service providers able to develop professional relationships with customers over a period of time have a distinct advantage over others in positively influencing their perceptions of fairness,” said Worthington.
“Distributive fairness, in other words how the ‘pie is shared’ between the customer and their financial services provider, is the cause for most concern among consumers – they don’t believe they are getting their fair share across the three types of financial service providers: banks, financial advisers and credit card providers.”
Overall financial advisers did well compared with their bank and credit card counterparts – hardly surprising given the opportunities they have to build personal relationships with their clients.
Longer does not mean better
However, banks suffered a significant decrease in perceptions of fairness as customer relationships lengthened. Customers do not perceive that long relationships with their banks led to improved treatment.
“Credit card providers fared worse than financial advisers and banks in a number of respects,” said Worthington.
“They do not have the benefit of strong interpersonal relationships with their customers and may need to review their policies and procedures impacting customer interactions in order to explore other ways to encourage greater perceptions of fairness among users.”
Commenting on the research, the Australian Centre for Financial Studies’ executive director, Professor Deborah Ralston said: “This research provides some very interesting and useful insights for financial service providers on the perceptions of customers and what builds customer loyalty.”
The research included an online poll conducted in April of 750 customers.
By Andrew Starke
16th August 2012
Source: Professional Planner http://www.professionalplanner.com.au