Study of International Financial Advisory Community Establishes First “Know Your Client” Benchmark


Public (Anyone can see)

FOR RELEASE: September 27, 2018


Pat Spenner
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Julie Bennett, 64 Media (on behalf of the AFA)
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Study of International Financial Advisory Community Establishes First “Know Your Client” Benchmark

Financial advisers who embrace best practices around understanding clients enjoy high quality client relationships and outstanding net client growth

AUCKLAND – (Sep. 27, 2018) – Financial advisers and financial planners (financial advisers) who
engage in leading “know your client” behaviours see 72 per cent higher net client growth and 56 per
cent more of their clients are very willing to recommend their services to family and friends, according
to a major new benchmarking study.

For the first time, the international financial advice community has benchmarked how financial advisers
come to know their clients. The study surveyed over 300 client-facing advisers in Australia, New
Zealand and the US, and was supported by an international coalition, including: Financial Advice New
Zealand; Association of Financial Advisers (Australia); Portfolio Construction Forum (Australia & New
Zealand); Financial Planning Association (USA); Berkeley Executive Education (USA); Capital
Preferences (USA & New Zealand); and T. Rowe Price (USA, Australia & New Zealand).

“This landmark study is a unique and powerful coalition, providing advisers the answer to the crucial
question – ‘what does it mean to know your client?’ For the first time advisers have a benchmark across
practices in USA, New Zealand and Australia,” says Katrina Shanks, CEO at Financial Advice New
Zealand. She adds, “The data and findings released over the next six months will be an indispensable
tool for firms who seek to grow their business and advice professionals who are serious about taking
their client experience to the next level.”

The study sought to identify the specific behavioural building blocks advice professionals can and
should engage in to know their clients, spanning foundational to advanced behaviors and techniques.
The building blocks cover areas ranging from how advisers understand client goals to how they manage
client family dynamics to how they apply insights from understanding clients, so they can deliver a
better client experience.

Other key takeaways include:

• Deeply Understanding Clients is More Personally Fulfilling for Advisers: Advisers who
engage in leading “know your client” behaviors gain deep personal fulfillment from a greater
share of their client relationships—up to 60 percent more of their client relationships.
• Emergence of the “Behaviouralist” Adviser: An emerging segment of advisers are using new
tools and technology to focus deeply on clients’ actual behaviors, not just what clients report or
say. That’s creating more surface area for advisers to deliver value to clients. Behaviouralists
see significantly higher client willingness to recommend, double the referral rates and nearly
triple the net client growth rate compared to other advisers.
• Family Matters: highly proficient know-your-client advisers spend a greater share of their time
directly engaging partners and adult children of the primary client. They are 40 percent more
likely to discuss aging-related lifestyle transitions, as well as cognitive decline, with their clients
and their families.

"‘Know your client’ is one of the foundations of financial advice,” says Graham Rich, Managing Partner
and Dean, Portfolio Construction Forum. “Yet there is surprisingly little measurement - and certainly no
industry benchmark - for how well financial advisers really know their clients. Until now. Continuing to
scientifically explore attitudes and behaviours around people and money is critical to delivering quality
financial advice outcomes, so the Forum is delighted to actively support this ongoing study,” added

AFA CEO, Philip Kewin says, “The AFA was delighted to participate in this ground-breaking study
which confirms our belief that the human aspect of the advice relationship is vitally important to both
advisers and clients. It reveals that advisers who have strong relationships with their clients have strong
businesses. Advisers with strong client relationships can potentially deliver superior outcomes, because
they have a genuine understanding not just of the client’s specific needs, but also of the client as an

Pat Spenner, study team leader and Head of Product and Marketing for Capital Preferences, commented,
“We were blown away by the participation from the Australia and New Zealand advisory community. It
lets us provide powerful country-specific benchmarks that are unique to these markets, and at a very
important time for the advisory community.”

“The values that this study encourage, particularly a client-centric approach, align strongly with the core
values of our firm,” said Murray Brewer, head of relationship management in Australia and New
Zealand for T. Rowe Price. “As today’s investors increasingly value advice through all stages of their
wealth journey, we believe this study can provide advisers with the ability to benchmark and improve
their offering, ensuring clients achieve the best retirement outcome.”

The benchmarking survey (Survey Link) will re-open September 27th thro November 15th to provide
other financial professionals an opportunity to benchmark their client understanding practices against
those of their peers. All client-facing financial planners and advisers are invited to participate.
Participants will receive a customized benchmarking report that enables them to benchmark their "know
your client" methods against those of their peers, as well as the greater advisory community.

Beyond benchmarking, the study is unique in that it aims to provide the step-by-step roadmap that
financial advisers can use to evolve their approach to understanding their client and thrive in an era of a
more empowered client. Additional information about the research initiative can be found here.

About the Study Methodology and Benchmarking Sample
Following intensive qualitative research with seasoned financial planners and domain experts, the
research team developed an online benchmarking survey. The survey was fielded July – September,
2018. Survey respondents participated on a strictly voluntary basis, with no paid respondents. The total
respondent sample size is 317, with 136 from Australia, 52 from New Zealand and 129 from the USA.
All respondents are client-facing financial advisers or planners.

About Association of Financial Advisers
The Association of Financial Advisers Limited (AFA) has been the authentic voice on the value of
financial advice for over 70 years. Today, the AFA is a vibrant, innovative association, where the
underlying driver of policy is the belief that great advice transforms lives. To this end the AFA is
striving to achieve the vision of Great Advice for More Australians. The AFA’s ongoing relevance as a
professional association is derived from its success in engaging with the major stakeholders in financial
advice including advisers, consumers, licensees, product and service providers, and the regulator and
government. Culturally the AFA believes in the value of collaboration to create powerful outcomes and
this drives how we achieve influence and work towards our vision.

About Capital Preferences
Capital Preferences offers financial service firms the most advanced technology for understanding
customers, leveraging decision science and behavioural economics. Its gamified profiling platform
allows financial professionals to improve client experience, while gaining unique insights into product
suitability and client behavior.

Capital Preferences is the creator of TrueProfile, the only tool for financial advisors that reveals their
clients’ true risk tolerance, loss aversion and decision consistency as defined by economic science. For
more information about Capital Preferences and True Profile, visit and follow on
Twitter at

About Financial Advice New Zealand - Helping Kiwis Thrive
The most essential element of financial well-being is quality financial advice. By helping advisers do
what they do best, and helping more Kiwis access quality advice, together we’ll help New Zealand be
financially better off.
You can count on Financial Advice New Zealand to be the voice for quality advice; to support quality
advisers; and to make a stand when adviser interests could be better served.

About Portfolio Construction Forum
Established in 2002, Portfolio Construction Forum is the specialist, independent, investment continuing
education, accreditation and certification service providing a curriculum which is curated for the
community of Australian and NZ practitioners and advocates involved in any aspect of constructing
multi-manager portfolios, enabling their better quality portfolio construction knowledge, skill and
expertise, in order to improve the financial wellbeing of individuals.

About T. Rowe Price
Founded in 1937, Baltimore-based T. Rowe Price Group, Inc. ( is a global investment
management organization with US$1.09 trillion in assets under management1 as of August 31, 2018.
The organization provides a broad array of mutual funds, subadvisory services, and separate account
management for individual and institutional investors, retirement plans, and financial intermediaries.
The company also offers sophisticated investment planning and guidance tools. T. Rowe Price’s
disciplined, risk-aware investment approach focuses on diversification, style consistency, and
fundamental research. For more information, visit