Engaging clients
Generally, this is easier with smaller firms but I am working with a sizeable product provider that has a small team which has seen the light. Most of their colleagues are scratching their heads wondering how this will ever work, but enlightened thought has led to action.
Entrenched thinking has blinkered an entire generation. If this does not change, firms might find themselves at significant risk, not from regulation but from competing business models.
If all you are really offering is a conversation about investment performance, and fiddling around with asset allocation and fund selection, then your traditional business is under threat – and so is your recurring fee for assets under management.
Advice firms that have shifted the conversation from products and investments to proper financial planning have found that clients are more engaged. That means relationships are stronger and advisers get paid for financial planning.
The quality of advice has also improved, which means reduced compliance risk, fewer complaints and, even if your focus is on more product distribution, better sales.
Check List
Questions to ask before remodelling your business
How do you position financial planning in the first meeting, or do you talk about compliance, products, investment performance and how great your firm is?
Do you do most of the talking or do you ask great questions and listen to the story?
Are you asking deep questions or are you uncomfortable with the intimacy of such conversations?
Are you prepared to be vulnerable or do you feel that is a sign of weakness?
Does that last question sound strange?
Are you prepared to let clients who are not right for your business walk away without selling them something?
Do you agree a profitable fee for your financial planning advice or is that given away in the hope of getting paid on winning new business?
When you gather data from a client are you conducting a ‘gap’ find or a ‘facts and feelings’ find?
Do you spend time with people or are you always in a rush?
When you talk about investments and risk do you arrange an asset allocation based on what clients say they are tolerant to or do you explore and explain various risk trade-offs that are relevant to this client?
Do you spend time discussing the detailed cost of a client’s current and future lifestyle or do you only ask about expenditure to determine affordability of the product you want to recommend?
Do you tell people what you think they need or do you show them where they are in relation to their life and their goals using a personalised lifetime cashflow forecast?
Do you present a lifetime cashflow forecast in a report for clients or do you present it live and engage in conversation?
Do you have annual review meetings and look back at investment performance or do you have annual planning meetings and look ahead to what’s next in the client’s life?
Do you use agendas and take minutes of meetings that you send to clients and ask them to sign off on them or do you spend your time filling in forms?
Do your managers persuade you to ‘always be closing’ or do they encourage you to develop relationships?
Do you rely on marketing language provided by product providers or do you do your own due diligence (or at least buy it in from an independent third party)?
Are you working for your clients or with your clients?
Please click here for Part 1 and Part 3 of the series.
