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Adding lots of value to your clients? Tell them about it!

A lot of advisers today are really starting to effectively demonstrate their value to new clients in their initial meeting. Using powerful presentations or other marketing material, they are setting out their advice processes and how these processes are really valuable to the clients.

However many advisers still struggle with reminding their clients of the ongoing value that they are adding, year after year. They’re providing great ongoing advice, adding value to the clients throughout the year but the clients just don’t seem to see it – they don’t realise the value added… So how can you keep reminding your clients of the tremendous value that you continue to add?

Here are two ways that I think are really important.

Have brilliant review meetings

This is a very obvious one, but there are some financial brokers who consider it a “win” if the client says they don’t need a review meeting! The review meeting going ahead is certainly not a win. Yes it might give you an extra few free hours, but the opportunity cost of reinforcing your value is significant.

Of course there is the “hard yards” in review meetings of reviewing a client’s portfolio, getting up to date values and potentially even writing a short review report. But this is balanced with the business opportunity of potential top-ups, a review of protection benefits and policies and new financial products needed. However the real opportunity to demonstrate your value on an ongoing basis to clients rests outside of the traditional review meeting agenda. Why not take a little extra time and set out for your clients some financial benefits that you’ve delivered to them such as;

  • The growth in actual euros of their investment portfolio
  • The tax saved as a result of their pension plan and any other tax efficient policies
  • The actual money saved in euros and cents as a result of a protection review you carried out previously.

 Now your ongoing fee / trail commission starts to look very small! However there’s still a lot more you can do at these review meetings to demonstrate further value to you clients.

  • Help your clients with their household budgeting. Trust me (as a consumer), this can add huge value to your clients!
  • Talk to them about their broader financial needs where you don’t provide the solutions. You can add value by tapping them into your network of solicitors (for their will or enduring power of attorney), tax advisers (tax advice) or accountants. Now you’re the person pulling all of the strings!
  • Obviously if you carry out future cashflow planning with your clients, this is an exceptionally valuable exercise every year.

Client Calendars

There are lots of activities that you carry out on behalf of your clients during the year. The challenge is getting them to notice the work that you’re doing on their behalf and then reminding them about it in an engaging and memorable way. One of the ways that you can do this is by providing your client with their own calendar of your services every year. Obviously you would create a nicely presented version of this, but the main content for your key clients might look something like this, if presented at the end of each year;

  • January: Client newsletter,
  • February: Investment rebalancing
  • March: Annual Review Meeting, client newsletter
  • April: Investment seminar, update on major market movements
  • May: Investment rebalancing, client newsletter
  • June: Golf outing
  • July: Client newsletter
  • August: Investment rebalancing, meeting with your accountant
  • September: Half Year check-in, client newsletter
  • October: Budget update, tax deadline review
  • November: Investment rebalancing, client newsletter
  • December: Christmas lunch

Now the client sees you working for them throughout the year, not just at a single point in time at the review meeting

If you’re delivering both of these supports in a structured and engaging way, how likely is your client to start arguing over your trail commission?

Will Clients Pay Annual Fees?

The whole area of fees sends a chill down the spine of lots of financial advisers. How much do you charge? Will clients pay? Will they pay every year? These are some of the questions I’m asked all the time.

Yes we’ve seen moves towards fees in other markets, with a lot of focus on the changes in the UK in particular. But that doesn’t mean that we’re moving to a fee only environment in Ireland. In any event, I think the question of commission v fee is the wrong question… To my mind, it’s all about what you’re being paid for, rather than how you are paid.

Maybe let’s start with some of the reasons that clients won’t pay annual fees, whether this is paid by an annual fee, a monthly retainer or as a trail commission.

 

They can’t afford them

There’s no doubt, there are many clients out there who just are not in the position to write you an additional cheque every year. Their income may be low, their outgoings may be high and these clients are seeking the minimum number of financial products to meet lender requirements and to provide basic levels of protection for their families. These clients are not going to pay fees.

 

They don’t see why they should

This is a more interesting group… These people can afford fees, have multiple financial advice and product needs but don’t see why they should pay for it each year. Whose fault is this? Well it’s theirs if they think that they can get your services for nothing. But maybe it’s your fault if they just don’t place enough value on what you do? You need to consider;

  • How much value are you providing beyond setting up products?
  • How robust and valuable is your planning and advice model?
  • How well do you communicate this to clients?
  • How well do you link this value proposition with your charging basis?

Get these right and you’ve a better chance of convincing this group to pay your fee each year.

 

They know another adviser who won’t charge a fee

There is always another adviser who will undercut you on price, indeed there are execution-only options out there for clients. However this is where the focus is solely on the product implementation. If you can demonstrate to the client that the fee is for the excellent and valuable advice that you give and that this will positively impact their outcomes, they are more likely to decide based on value gained rather than the price paid.

This group is a tricky one for advisers who hate to see a client go elsewhere. But if you’re not being paid a fair price for the value that you bring, it sometimes makes sense to walk away…

 

So what are the main activities that you need to undertake in order to give yourself the best chance of convincing your clients that the annual fee is worth paying?

 

Develop a compelling advice proposition that clients value

I know that there is a huge amount of talk at the moment about the need for a clear value proposition… But it really is a basic requirement if you hope to convince people to base their purchase decision on value rather than price.

Your value proposition needs to demonstrate to clients and potential clients, what you do, where you add value, why this is important to them and the positive impact that you will have on helping them achieve their financial objectives and better outcomes. Think this through from the client’s perspective – if they can’t connect with the value for them, you’re going to find it more difficult to justify your fee.

 

Make sure clients value your advice, not the product purchase

Move the conversation away from choosing the right product and then implementing it. At the end of the day, the clients don’t place much store on this. Advisers who are today receiving large portions of their income from fees focus more on helping the client really understand their life and financial objectives and then develop a plan for the clients to help them achieve these objectives. The products merely become vehicles to help them get there.

 

Deliver a great service and review process

If you’re going to look to charge your clients each year, you’re going to need an ongoing service that clients believe is second to none and worth the price paid. This will mean being available, adding value throughout the year and communicating regularly with clients.

Central to this is developing a really powerful review meeting. This is not just about communicating updated values (even though you do this too), but it is about really demonstrating to the client how they are progressing towards their financial objectives, and why continuing on this journey with you offers them the best opportunity of achieving their desired outcomes. So broaden this meeting out, bring in all of your undoubted experience and expertise and package it, so that your clients will seek out these value meetings with you, year after year! And it makes it easier for you to justify your fee.

 

What experiences have you of charging fees? What are the main hurdles that you encounter? Please feel free to leave your comments below

 

 

Photo credit:www.LendingMemo.com

Beat your competition all ends up!

You’ve been approached to pitch for the opportunity to advise a really great prospective client, maybe a wealthy individual with a lot of assets to manage or a pension scheme for a local company. However you also know that another adviser has been given the same opportunity….

So what do you do? One route obviously is to go in “as cheap as chips”, provide your advice for free and cut your transaction price to a level that just about makes it worth your while. Yes, you’ll win some clients this way, but not the ones you really want. Because every future conversation will result in a haggle over your price – no surprise really as you started it!

The alternative is to beat the socks off your competitors and demonstrate to the prospective client that you’re the only game in town for them to consider. Your challenge is to have demonstrated this by the end of your first meeting (your pitch) with them. Here are 5 ways you might achieve this;

 

Know the customer better than your competitor

Today there are so many ways to learn lots of really valuable information about your prospect before you meet them. This can give you a real edge, enabling you to anticipate questions or issues and to chat knowledgeably about areas of interest to them. At the very least, it shows your interest in them and their business.

Starting with their company website, you can learn about their business, getting a sense of their markets, their size and what is important to them. The prospect that you’re about to meet might feature in the “About Us” section so check this out too.

Check out their social media profiles. In particular LinkedIn may give you very rich information about the person. You can learn a lot about the person professionally, as well as their interests etc. You can also see if you have connections in common – this can be useful for the social chitchat at the start of the meeting.

 

Focus on their objectives and outcomes, not yours!

At the meeting, your initial goal needs to be to connect with the person and build trust before you can get into problem solving. To do this, you need to find out what their problem or challenge is and fully understand what their actual objectives and goals are. What will success look like for them? What will they consider a good result?

Your questioning style is very important here. The key is to use lots of Open questions; “what is your biggest challenge”, “why is that challenge so significant for you”, “how have you addressed this so far”, “when are you expecting a result” etc. Questions that cannot be answered with a simple yes or no!

This initial stage is all about getting the client talking. Once they are talking, their issues will become clear and then you can start to think about demonstrating how you can address the actual challenges that they are facing!

Hopefully at the same time, your competitor will dive in and start setting out their credentials and their approach to solving the client’s problem – quite probably not the right problem at all!

 

Then demonstrate your credentials

Once the client’s problem is clear to you, now is the time to set out why you are the answer to their prayers! This is a critical step – after this the client will decide who he is appointing to look after his affairs!

First of all, you can demonstrate your professional approach easily and effectively by walking your client through your planning and advice approach. This will give the client comfort that you are a professional with a robust approach, helping to build that all-important trust. I believe that this is best delivered using a short presentation on an iPad or similar device.

Case studies (anonymous) are another effective way to demonstrate your credentials. They allow you to showcase innovative approaches that you might have used in the past. They also demonstrate your experience in dealing with challenges similar to that posed by the prospective client.

Finally testimonials are a great endorsement of your capabilities. I always encourage financial advisers to seek permission to use the full name of the person giving the testimonial, as it gives it credibility – does “John T, Dublin 6” really exist?

Hopefully your competitor has just been having a chat with the prospect, saying how good they are but not really backing it up at all…

 

Practice – it’s not easy!

These last two areas of questioning the prospect effectively and then demonstrating your credentials are not easy. Road test them on your staff, friends and family. Get people to critically appraise your approach. Like all similar tasks, it’s going to take a few goes before you get it spot on. The last thing you want is to be trying it out for the first time on the best prospect you’ve had in a long time!

 

Start delivering value long before your pitch

This point should probably have been made at the start but I kept it to the end as not all advisers are in a position to deliver it at the moment. Providing ongoing content to clients is so important, deepening the relationship, demonstrating expertise and adding value. This might be in the form of an email newsletter or other such communication. If you do this, add your prospect to the list as soon as the first contact is made (get any necessary permission to do) and start sharing your content with them straightaway.

This will immediately set you apart from your competitor, giving the prospect a taste of what they can expect from you – a valuable, professional, robust approach to all that you do!

At this stage, hopefully you see the other guy’s white flag!

5 elements of a winning client proposition in 2014

I’ve been lucky to spend the last couple of years working with a broad range of financial brokers and planners, and as a result have been fortunate to gain great insights into some really great advice firms operating in the Irish market.

A question I’m sometimes asked is; “What’s different about the winners?” Now there’s no easy answer to that, but there is one theme running through the successful firms and that is a clear client proposition. These firms tend to be clear about their target markets, their ideal clients, what they offer (and don’t offer), what makes them special and how they get paid. And very importantly, they are also very good at articulating this to clients.

The whole area of client propositions is very broad though and can encompass many different elements. So here are 5 activities that I believe will help advice firms to really differentiate themselves from the rest in 2014.

 

No more chats!

Spend some time over Christmas developing a presentation for delivery at your first meeting with prospective clients. If you get a new iPad for Christmas, even better still! Use that to deliver the presentation. Meeting a prospective client and having a chat is fine and maybe not hugely damaging. But it’s hard to make it memorable. However if you have a well-crafted (and short) presentation, that you walk through in an engaging manner, and that includes some provoking questions for your client to ponder later, you’ve a much better chance of leaving a positive impression and getting that prospect coming back for more.

 

Spend time on income and expenditure

One of the unfortunate traits of some of the less successful firms out there is their rush to “get to the money”. While their intentions are noble, in that they want to sort out the investments for their clients, in fact what happens is that the client gets forgotten as the focus is on the money. And once you forget the client, your future with the client is inextricably linked to the performance of the money. Which is difficult if markets go against the client.

The successful firms out there tend to focus more on the client and one way they demonstrate this is through helping clients really examine their income and their spending. And then going through a rigorous process to help them balance the personal books better! They don’t do this in a superficial way, but in a way that is really valued by clients, most of who are very poor at doing this themselves!

 

Build future cashflow planning into your proposition

My prediction for 2014 is that there will be a steep increase in the use of future cashflow planning by financial advisers. Why? Because more and more clients will become aware of the value of it by those financial planners already offering it, and those clients will demand it.

Future cashflow planning completely changes the conversation. It lifts the conversation out of the past and the present and focuses both the adviser and the client on the future objectives of the client. And it gets them really working together on trying to achieve those objectives.

However the real benefit of it to me is the reliance on the annual review happening every year to track progress. Clients demand their reviews – do your clients?

 

Develop powerful review meetings

Again, another observation… Lots of financial brokers and planners have recognised the importance of a compelling client proposition and are furiously working on developing a compelling one at the point of sale with the client. However relatively few are working on developing a compelling review proposition, to deliver to their client year in and year out. And most of these brokers are attempting to justify a trail commission basis!

If you want to receive an ongoing payment from your client every year into the future, you’ll need to develop a review proposition that the client values and that they demand actually happens every year. This is achievable – there are many clients out there who experience a truly valuable review service and these clients happily pay ongoing fees as they recognise the value they are receiving in the review meetings.

Do your clients demand their reviews with you? Do they feel the meetings are worth more than the ever-growing trail commission that you are receiving? If not, you’re at real risk of losing these clients in the future, just as they become very valuable to you.

 

Think engagement

It is so important to engage your clients on an ongoing basis, outside of your sales and review meetings. You need to stay in their minds through gently adding value throughout the year, so that when an unexpected financial challenge or opportunity arises for them, you are their first port of call.

Yes it’s hard work and takes a lot of time. If you don’t have the time or the inclination to do it, pay someone else to do it for you. If you don’t, someone else will begin to engage your clients and leapfrog you as a financial expert worth talking to.

If you make these changes to your client proposition, I can pretty much guarantee that they will have a material impact on your business. You’ll value your own proposition more and as a result, your confidence will increase, enabling you to communicate your value better. And your clients will love it!

Very best wishes in developing your proposition in 2014! If you have any comments in relation to my suggestions, please leave them below.

Why don’t my new clients realise how good I am?

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!

Treat the first meeting like a first date!

Let me start by saying that none of my friends ever took dating advice from me! So while I certainly can’t be considered a modern oracle on the art of dating, by going back in the depths of my mind I can just about remember some of the golden rules. And the funny thing is, many of these rules apply to that all-important first meeting with a prospective client which is central to one of the most common challenges that financial brokers ask me for help with; turning more prospects into clients.

So going back 20 years to when this innocent twenty something year old was doing his best to even get a first date, what were the important things to remember and how are they relevant to the first meeting of a financial broker with his / her client today?

Be Prepared

Starting with the old Scouting rule, this was always very important. Having a plan and trying to stick to it. Thinking ahead and trying to work out what were the most important buttons to press to ensure that the date went well and would potentially turn into something more…

Equally with the first meeting with a prospective client, you need to have a plan. This will normally be an agenda or a finely tuned process that you use at these meetings. And in relation to the buttons that you press, you’ve got to recognise the main challenges that you face in this first meeting. The potential client is internally asking the questions;

  • Is this broker the right person for me?
  • Do I trust him/her?
  • Is he/she going to add value to me, and address what I think my issues are?
  • Do I think he/she is being open with me, do I understand what I’m getting into here?
  • What does this office say about the broker?

They are not thinking about products – so nor should you at this stage. You’ve got to mentally tick off the above listed questions to ease your client into a relationship with you. So don’t start with a barrage or personal questions (the factfind) – this never worked on a first date either…

Be interested

I found out to my cost (more than) once that a sure-fire way of destroying any potential interest that my date had in me was to spend the first hour wittering nervously on and on about myself. Instead there was more to be gained from letting her do the talking, and as a result learning about her values, her interests and her expectations.

Back to the business meeting the same is true. You don’t really know at this stage (you might think you do) why the potential client is in front of you. So now is the time for gentle but strong open-ended questioning. You want to find out what the client wants, what their values are and their expectations of a business relationship with you. Indeed this helps you decide whether they are potentially a client for you. Letting people talk about themselves will help to put them at their ease, once you don’t probe too deeply at this stage.

Win some trust

Back on the dating scene, this started by putting the lucky lady at ease in my company and convincing her that I wasn’t an axe murderer, or that I was going to leave her with the bill at the end of the night – I had to win some trust.

So in the business meeting the same applies. You need to convince the client firstly that you can be trusted, that you are in the business of making them money and not losing them money, that you are indeed someone that they would like to work with and have a follow-up meeting.

To me, a short visual presentation of how you advise clients is at the core of this. Demonstrating a robust advice process builds trust, gives an understanding of what you do and how you do it, and helps the client recognise why you are the right person to manage their affairs. And still products don’t come into it yet – that’s because the client just expects you to be fully knowledgeable in that area and product knowledge will rarely be a means of differentiating yourself from your peers.

If you want to use any support material to strengthen your case, show some real testimonials and case studies of innovative advice solutions you used in the past.

Remember, your aim at this stage is to build rapport with the client, rather than problem solving. You are trying to demonstrate your capability as an adviser and your suitability as the right broker for the client.

Then demonstrate that you are the only person in town for them

On the date, the wine was now hopefully starting to flow.  Then it was time to show that I was actually quite a likeable and interesting guy, before eventually convincing her that I was definitely worth seeing again! This usually entailed being willing to discuss & confront some tricky issues… Openness in this regard always helped.

This comes through in the first meeting with a client. Once that initial trust is won, don’t lose it by skirting around some big issues. For example if the client raises this the question of how you are paid. Be crystal clear and open, discussing with clients at this first meeting the value that you will be bringing and how your remuneration will be based on this.

Get the location right

The choice of restaurant was always crucial. However if my house was going to feature at all at this early stage, it was very important that it was at least clean!

The same applies to your office as this will help form that first impression. Will the client think that this is a really professional outfit that they’ll happily trust their affairs to, or does it all look a bit all over the place? They will perceive the environment as a reflection of how you manage your clients’ affairs.

What about afterwards?

So the first date has all gone swimmingly. Now it’s important that you get the follow-up right. Not too pushy but at the same time you want to move things along a notch. Well the same applies to your business meeting. Hopefully you’ve got off on the right foot so now it’s time to follow through with the professional approach you outlined at the first meeting.

Trust me, I failed more than once at the dating game! However I hope that some of my lessons bitterly learned will help you in your first meeting with your clients.

If you’ve any thoughts on what’s important at the first client meeting (I’m not looking for dating tips!), please leave your comments below.