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Four quick wins to help take your annual reviews to the next level

For financial adviser use only
When meeting with retiree clients for their annual review, it’s a good opportunity to reinforce how your advice is making a difference. In this article, we discuss four key areas that advisers have told us are important in making the annual review more valuable.

In a year that’s been marked by uncertainty – from a financial perspective – many more clients are turning to their adviser for reassurance.

In their 2020 Financial Advice Report1, Investment Trends found three quarters of clients have reached out to their financial adviser to discuss impacts of the pandemic and better understand what this means for their goals and finances. When it comes to feeling more confident about their financial future, clients, in particular retirees, are reaping the benefits of advice. Based on more than 3,000 responses from the 2020 YourLifeChoices and Challenger survey
2,retirees  who have spoken to an adviser were 14% more likely, on average, to be confident or very confident in their ability to live a comfortable life in retirement. They were also more likely to report being happy with the money they have available in retirement. 

Making the most of an annual review

The Investment Trends research also highlights the importance of being proactive in communicating with clients during this time of change. Overall, when clients initiate contact with their adviser, they’re less likely to be satisfied with the experience compared with clients who are being contacted by their adviser proactively to talk about their financial plan and any concerns. These findings suggest that a proactive approach to annual reviews is more important than ever. Even if you’ve been communicating more often during 2020, your annual review with a client is still likely to be the longest and most valuable interaction you’ll have with them during the year. Based on our experiences in talking to advisers, we’ve identified four quick wins that may help strengthen your relationship with clients, affirm your value in delivering better financial outcomes and help bring them peace of mind.
44654 Age Pension Icons 80x80 R1-1 Focus on their concerns

Advisers generally discuss changes to their client’s circumstances during their annual review meetings. But what can really make your review stand out is understanding any changes that signal an adjustment to the plan prior to the meeting.
Advisers tell us that having preliminary conversations help ensure they are well prepared for the meeting and can make all the difference in ensuring they are focused on addressing specific concerns tailored to their client’s needs. For example, for clients who are more concerned about inflation, you may want to explore a retirement income stream where payments are linked to CPI, allowing them to keep pace with the cost of living. Where clients are concerned about missing out on interest rate rises it can make sense to recommend a product linked to changes in cash rates. Paying attention to these details can help you prepare in advance, tailor your strategies, as well as ensure any changes you make to their existing plan, make sense to them.

44654 Age Pension Icons 80x80 R1-2Help retiree clients feel confident during periods of volatility
The events of 2020 have put retirement income planning in the spotlight. Market volatility and low interest rates have each contributed to a renewed focus on the importance of retirement savings and a plan to make them last the distance. As these circumstances are likely to be top of mind for many retiree clients, revisiting and retesting their retirement income strategies can be central to their annual review.
Taking them through their current financial plan, with a focus on how any recent changes could impact their overall position and outcomes is a key part of any review discussion. Making time to answer questions about these potential impacts on each clients’ lifestyle and goals will also be an important part of the process.

44654 Age Pension Icons 80x80 R1-3Re-evaluate existing retirement income strategies
With less certainty in global markets, it could be a good time to remind clients that not all retirement income is linked to market performance and that it may be worth exploring strategies that could improve their position overall. One way to do this is by seeing if your clients are eligible for an immediate increase in their Age Pension. For clients already eligible for a part-pension, strategies that help reduce assessable assets and income may help to increase their Age Pension. For clients currently ineligible for the Age Pension, these strategies could help them become eligible, which may also open the door to other Centrelink benefits such as concession cards. Where a client is receiving a reduced Age Pension because of the assets test, transferring some assets to a lifetime income stream, such as a lifetime annuity, may lead to an increase in
Age Pension while also delivering a secure income for life. Exploring and implementing strategies that will help improve your client’s overall retirement income outcomes is key to reaffirming client confidence and providing reassurance of your advice.

44654 Age Pension Icons 80x80 R1-4 Finish with a ‘simple’ summary

2020 hasn’t been a typical year. With so much change going on, there is bound to be a lot of ground to cover in annual review meetings. In addition to the standard Record of Advice, summarising key points and actions at the end of the meeting can help clients to walk away knowing why any changes and recommendations are in their best interests. Advisers tell us that avoiding the use of jargon, sticking to simple language and being clear about next steps can help clients grasp the ‘what’ and the ‘why’ of their financial plan, giving them confidence that it is in step with recent changes and their future goals.

To learn more about strategies to help improve retirement income outcomes for your clients click here.


1 https://www.adviservoice.com.au/2020/09/demand-for-financial-advice-doubled-in-the-last-five-years-investment-trends-2020-financial-advice-report/
2 YourLifeChoices and Challenger survey: Financial security in retirement after the Coronavirus crisis, April 2020.