For the last 10 years, I’ve had the privilege of working directly and very closely with many of the very best financial planners and brokers in Ireland. So what have I learned about you in that time?
You are the most resilient bunch
Back in 2011, many of you were on your knees, as the market for personal financial advice and solutions had dried up almost completely. However you simply dug in, scaled back your businesses to a more sustainable size, re-examined your propositions and got out there meeting your existing and prospective clients. After a few tough years, many of you were rewarded and have seen the very best of times since. And then Covid hit…
… and most of you didn’t bat an eyelid. You switched to remote working and I know there are many of you who had record years in 2020.
You do invest in your businesses
When I started out in 2011, if I had got a euro from every person who said to me that “brokers won’t pay for anything”, I’d be a richer man! It was a demeaning and unfair comment that doesn’t recognise the professionals that you are. The bottom line is that you are willing to invest in your businesses, once you see value in doing so. The days of only engaging with suppliers when a provider footed the bill are long over. Yes, you are very discerning about when and with whom you engage, making sure that you can see a clear return for your investment. But that’s only right. This ensures suppliers (like me) are focused on the value we can bring to you, rather than simply pushing products and services at you. Is this any different to the work you do with your clients?
The market is fundamentally different today
Ten years ago, the term financial planner didn’t exist. Then it became a fashionable title for people to use. But today it perfectly describes what so many within the advice community do every day. So many firms have actively shifted their business model from one centred on product sales, to one where the financial plan developed by the planner sits at the core of the client proposition. And this has resulted in a whole new breed of advisers; those who are adding significant value to their clients and are now confidently in control of their business, not dependant on product sales and not exposed to the whims of the market and the changes in product strategies by providers.
Less clients being brilliantly served
Ten years ago, the most common question I was asked was, “How do I get more clients?” I’m rarely asked this today, in fact on balance I’m actually asked the opposite more frequently! The aim of many advisers today is to deal with less clients and to serve them brilliantly. The challenge is in the last bit, and that is where we are helping firms every day, helping firms develop excellent and valued client retention strategies as opposed to the race for new business.
A clear and valuable proposition and effective, ongoing communication are so key to retaining your valued clients today. While some of you are doing this well, if there is one area that requires improvement across the profession, it is probably here. Being able to articulate your value and then remind clients of this on an ongoing basis remains a challenge for many.
You focus on investor behaviour rather than investment expertise
A big change over the last 10 years has been the approach to investments by advisers. Back then lots of advisers worried about selecting the best investment for clients, beating benchmarks and worrying whenever performance dipped. You spent your life tweaking asset allocations and fund choices for that extra ounce of performance, that more often than not evaded you and your clients.
Today I see advisers focused on getting the right portfolio in place for their client and then spending their time focused on stopping the client from blowing it up through their constant meddling! Some of the even more forward-thinking advisers are formally recognising where they add value, don’t see themselves as investment specialists or don’t want to potentially damage client relationships through poor advice, and as a result are outsourcing the investment expertise to 3rd parties.
Technology is critical…but not everything
How do you feel about robo advisers now, who were going to herald the death of financial advisers? Excellent financial planning requires deep, trusted relationships built upon meaningful and highly personal conversations. Yes, a machine can hugely help to improve part of an adviser’s value chain, but it hasn’t as yet replaced this most critical piece of the relationship…and I say it never will.
But technology also plays an enormous role today. What would your financial planning proposition look like today without Voyant? Many of you I know would say that it wouldn’t exist. And look how technology aided your business when Covid struck – could you imagine going back to the days of no remote meetings and no Docusign?
Some are still trying to be “all things to all men”
Having a clear target market makes your life so easy. You can then focus your client value proposition, your sales activities, your marketing messages and indeed your whole support infrastructure around meeting the needs of specific groups. But some only see the risks involved in this – narrow groups of people to target, missing broader opportunities etc. As a result, some financial advisers continue to try to appeal to everyone. And as a result, they don’t really connect with anyone. Yes, your target market must be big enough to sustain you. But if you then focus your efforts on them, you gain the opportunity of creating a real standout positioning for yourself.
Pricing and justifying your charge are still big challenges
One of the most common questions I’m asked is on the topic of charging. However, the conversation has definitely moved on a bit. Many of you are happy with what you are charging clients – often but not always being paid by a provider or platform. The change though is that lots of you are now equally focused on how to justify your charges to clients. As long-term value is being built up in your business, you recognise that this value is only locked in for as long as you retain your clients. To do this, you must be able to justify what you charge. And this is one of the main areas where advisers seek us out – helping them to build their propositions to a point where they can clearly and confidently communicate what they charge, with little risk of losing the client in the process.
So, ten years on, what has changed? I see a far more confident, professional advice sector that is clear about the value that you add. I’m just thankful for being part of your journey.