BT’s annual study tour this year took advisers to the United Kingdom.
The five-day trip included meetings with advisers, investors and industry bodies. This short article is part of a series of key lessons learnt from the trip.
Our best currency is contact. It’s self-evident for financial advisers, but that doesn’t mean advisers spend enough time staying in touch with clients.
Advisers should be looking for every opportunity to talk to clients, and that means more than normal scheduled reviews. There needs to be constant contact that adds value.
Even in a digital age, face-to-face meetings still matter. Clients want to know their adviser.
As Fidelity put it, if the only contact with a client is what an adviser is contracted to do, then they don’t have a relationship. Rather, they have a transaction.
Another adviser, during bond market turbulence following the release of a very poorly received mini budget in the UK last year, suggested his team ring every client to check in to see how they were faring amidst the political and financial drama.
The responses from clients to the calls were very positive, not because of financial outcomes, but because the advisers cared enough to make contact.
The BT UK Study Tour attendees heard several examples of the benefit of knowing your client and understanding details of their lives. Knowing that a client has a new grandchild, for example, shows that you care. But it’s also important when making those calls you have something meaningful and relevant to say.
Levels of service
The Tour demonstrated that different firms have different levels of service, depending on the client. At the very top end, some act as financial concierges, helping clients be financially organised. The adviser provides a range of services, above and beyond expectations.
The next level is core clients, where general financial planning is provided.
And then there are clients who are not as profitable. There is a cohort of clients that want simple, low cost and sometimes episodic advice - but regulations mean that the cost to serve these clients make them unprofitable.
Neither Australia nor the UK have found an adequate solution for these clients.
One UK company, True Potential have spent time thinking about ways to deliver lower cost advice, and are using content including seminars, workshops and podcasts, to reach a broader audience.
This includes next generation customers who may not currently be profitable as clients. The True Potential model, which captures beneficiaries, essentially provides an incubation service for the next generation of clients.
Another solution among the firms visited is different types of service for the various levels including one who is leveraging digital channels, such as videos, to provide a service to less profitable clients at a lower cost.
Another UK firm heavily focusing on continual engagement with clients is First Wealth. It has developed a precise assessment tool so advisers can better understand their clients. It is based on financial wellbeing, which First Wealth defines as “being and feeling financially secure so you can focus on what matters most to you”.
First Wealth has codified engagement with clients, including emails, calls and meeting template scripts to deliver consistent messaging.
The lesson for Australian financial advisers: know your clients and segment them within your business. Use technology to become efficient in servicing clients and for the less profitable clients, keep working on a solution.
