Advisers could be missing out on valuable business opportunities by failing to properly evaluate success, an independent research body has found.
Adviser Impact's report The Rules Of Engagement, which was published with Vanguard Asset Management, found that the ways advisers usually judge success - such as on trust and loyalty - were not good indicators of how well a business would do in the future.
The study found clients who were less engaged with what their adviser does for them were far less likely to refer them to their friends and family even if they were seen to be happy with their service.
Adviser Impact chief executive Julie Littlechild said:"Advisers may have been measuring success in the wrong way for a lot of years.
"Satisfaction and loyalty just aren't significant enough measures and advisers may need to take a very different approach if they are going to win over some of the less engaged clients and build much more profitable relationships."
She said the research points to a greater connection between the drivers of engagement and value.
"Advisers need to take a very hard look at the way in which they are building relationships and ensure that they have got an offer in place that really adds significant value."
Adviser Impact's report, which was based on data collected through its Economics of Loyalty research, found that all of the 22% of advised customers that were classed as 'engaged' claimed to have referred people on to their adviser, compared with only a couple of percent of those that were not 'engaged'.
The report identified a group of adviser clients identified as 'hybrids' - clients who were only seeking advice for specific services or tasks as opposed to those fully advised, who worked with an adviser to manage their investments and/or financial plans.
This 'hybrid' group made up half of all clients and was less likely to be 'engaged' or satisfied than its fully advised counterpart.
Littlechild said: "I think a lot of consumers simply aren't clear on the value of advice and it's the responsibility of the industry to communicate that."
"The fact that we have got 50% of clients in the hybrid category speaks volumes to me. It means that about half of the advised market is probably up for grabs right now.
"Those advisers that get it right will see enormous growth. There has probably never been a better time for growth for those that are doing it well."
Aviser Impact's report is based on research conducted in May 2013 among 760 consumers across the UK who work with a financial adviser.
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