Perfect profile
“The different services offered by the firm will need to be reviewed, along with identifying the services they want to offer. A business needs to design the advisory service it wishes to offer – typically this is linked around the financial planning process,” she says.
“The service needs to include everything the firm does for a customer. This enables a firm to cost the service. Segmenting customers is a crucial step. Advisers should use a consistent model to identify criteria and use around four or five criteria that are understood by everyone.
“Advisers are increasingly looking at the different types of investment approaches available to their customers and are formulating these into distinct service levels. It is then up to the customer to decide which service suits them, with help and guidance from their adviser.”
It should not be assumed that someone with a larger portfolio needs or wants discretionary fund management or that someone with a small portfolio does not want a bespoke portfolio of funds.
Pienaar says: “Having a segmented customer proposition like this can help advisers ensure they are offering different investment solutions to meet different customer requirements. It can also ensure the adviser is paid an appropriate fee for the services they provide and can help build overall profitability and sustainability of the business.
“Understanding what the customer really values, knowing how to deliver this at a price they are willing to pay and at a level that maintains profitability for the business, is critical for businesses in transition.”
