I was working with a financial adviser recently (let’s call him Jim for the purpose of this article) who asked me that exact question. He was incredibly frustrated. While acknowledging that he’s not perfect (show me someone who is!), Jim articulated to me that he gives excellent advice to clients, that he works really hard on their behalf and that he is very competitive in his charging structures. And I fully believe that he was painting a realistic picture. The problem is that Jim’s new clients don’t seem to realise the value that he’s bringing to them. They appear a bit under-whelmed at the end of the initial advice process.
To help Jim, we worked through his sales process and I gave him a few pointers as to how I felt he could engage his new clients better. Jim was happy for me to share some of the points we discussed, which I’ve done below with a few more besides to help you better demonstrate and communicate your value to clients at the outset of your relationship with them. On another day, I’ll set out how you continue this going forward to really cement your relationship with your clients.
Have a well thought out process and explain it to the client.
Jim showed me his agenda for his first meeting with a new client. It all made a lot of sense. However when pushed by me to role play the meeting, we discovered that the agenda was actually just a bit of a crutch and the meeting bore very little resemblance to the agenda.
When we unpicked this, it became clear that Jim had been using the agenda for years, partly in the belief that it demonstrated professionalism. It definitely can do, if you follow it. If you don’t follow it or even worse if it doesn’t really make sense, then it will achieve very little.
As you may know from previous posts, I’m a firm believer in spending a lot of time developing out your sales process and then building an engaging presentation to communicate It to clients. This builds trust, it demonstrates professionalism and should set out a roadmap that you and the client will actually follow.
Two ears and one mouth
Yep, we all know this one but it is surprising how often it gets forgotten. Jim was dying to get “stuck in” on the client’s behalf. So he was diving into the factfind as quickly as possible to learn all he could so that he could then advise. I firmly believe that this is a mistake. Now is the time to get the client talking. Why are they in front of you? What do they want to achieve? I’m not talking about growing their assets by 6% p.a. or building up a fund of €x. Instead what are their life ambitions, their real goals? What do they want to be able to do in the future?
When they paint these pictures for you, then you can start putting numbers against them. And help them identify what they have to do to achieve them. It might seem a bit “touchy-feely” at the start but trust me, it will feel very real to the client, as these are the dreams they are thinking about every day.
So it’s time to sit back and listen. There’s plenty of time for the factfind after this!
Don’t forget the everyday stuff
No matter what you call yourself; a financial broker, a planner an adviser – at the end of the day you are trying to improve the financial future of your clients. Jim does this in a very thorough fashion. He completed a very rigorous factfind, he analyses his clients’ risk appetite and tolerance and puts a huge amount of effort and innovative thinking into his recommendations. He adds real value in the product solutions that he recommends. And puts no time into the more mundane area of everyday budgeting and cashflow management…
I work with a financial adviser myself on my own affairs. He provides me with excellent advice; identifying objectives, risk advice, financial planning, cashflow planning & product choice. Ask my wife Louise (that is her real name!) why is he so good, and she will talk of the attention he has paid to our everyday income and expenditure. In her eyes the real stuff, the factors that we can control.
This can get lost in the rush to “get to the money”, helping the client to grow their wealth through the big decisions of investment strategy and product choice.
Apart from the other valuable support we get, focusing on the small stuff results in Louise making sure we never miss our review meetings with our adviser. This is also a very important factor in being happy to pay his fee every year.
Cutting down trees
Jim then showed me his reports. Well written, no typos and good grammar throughout. The problem is no-one will ever read them. They are just too long. As a result the clients don’t realise the thought that went into them, they assume there’s just a load of padding.
Get the key points up front in the report for the client. Try to get it on one page, certainly a maximum of two. All the discretionary reading should sit behind this in appendices. Some clients will read them, some won’t. But at least now they’ll all read the important stuff.
Twenty page documents do not justify higher fees.
Work out what’s important
Usually a financial plan will result in multiple recommendations. This is where the client can get in a spin. Help them out of it, show them what is important in the short, medium and long term. What are the “must do” items and what can wait? Help them to prioritise their spending, their time and their attention, as they will struggle to do this themselves. They will value your experience and help in this regard.
This is of course by no means an exhaustive list of how to demonstrate value, instead they are just a few thoughts on how you can connect better with your clients at the outset of your relationship with them. Any views are welcome below!