Financial Planning in Australia
4ed –by Taylor, Juchau, Houterman
Solutions by Sharon Taylor
THE CLIENT–ADVISER RELATIONSHIP
Solutions to Questions
Every day the volume of information available to the general public and
advisers alike grows exponentially. What are the sources of this information and what
is its impact on the client and the adviser?
Impact of information explosion
In today’s world we are exposed to the ever-increasing amount of information
in the marketplace. It is important to recognise that there are both
advantages and limitations as to the use of this information from the perspective of
both the clients and financial planning practitioners. Today we live in an information-
rich society. We are continually faced with increasing amounts of information from all
directions — television, print media, internet, radio, journals and magazines, as well
as the advice of friends and relatives. The media has played a very important role in
the distribution and speed at which information is available. Whether from television,
books, consumer magazines, radio programs and the like, it seems we, the
consumers, are inundated with information. The ultimate information source, the
internet, has only added to this plethora of information.
In the past, the majority of ‘average’ investors have found it difficult to understand the
small amount of information that was available to them and, consequently, the
financial adviser took on the role of educating the client as to how to reliably use the
most appropriate information. In the nineties we saw a wealth of information become
readily available. Now, anyone who is interested can readily educate themselves on
investment, risk management and the variety of products available in the
The accessibility of information, as well as the volume of information available, has
impacted greatly on the relationship between the client and the adviser. It is
important to understand how this information may affect the attitudes of both the
client and the adviser.
Impact of the information explosion on the adviser
The adviser now has another dimension to manage within the adviser–client
The client may now have access to a whole range of information, which previously
was the domain of the adviser. Hence, if advisers are to add value to the relationship
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© 2010 Reed International Books Australia Pty Limited trading as LexisNexis.