Of the many learnings to come out of the Royal Commission, none are as important as the need for honest and transparent communications between financial advisers and their clients when it comes to financial products and services.

Trust is the bedrock of a strong adviser-client relationship. This year’s MetLife Adviser-Client Relationship Report revealed 85% of consumers rated honesty and trustworthiness as the number one attribute they look for in an adviser and 78% of consumers rated transparency about fees and commissions as the second highest.

Despite this, there is an alarming lack of awareness when it comes to consumers’ understanding of commissions, with over half (55%) of consumers unaware of the amount of commission their financial adviser receives. 

Interestingly, when asked if removing commissions would make consumers more or less willing to see an adviser, nearly half (47%) indicated that it would not change their willingness while one in five said it would make them more likely to see an adviser.

Clearly, the issue here is not whether an adviser receives commissions, but that the practice of receiving commissions might be too opaque and this is leading to confusion amongst clients.

With this in mind, transparent and honest conversations around the commissions and fees attached to certain products and services may need to be had at the outset of the adviser-client relationship, to ensure there are no unwanted surprises down the track. 

And one of the avenues advisers could explore is whether they are offering the right payment structures, which best suit the needs of their current and potential clients.

It might seem simple, but the research suggests offering transparent, flexible payment options will go a long way in assuring clients they’re covered by the right products for the right reasons, not because of any hidden benefits an adviser might receive.

At MetLife, we’re passionate champions of quality advice and we’re committed to taking a customer-centric approach, supporting advisers to better serve their clients and navigate the changing world of life insurance.

For more information read the full MetLife Adviser-Client Relationship Report or call 1800 523 523 to speak to your local MetLife State Manager.