What questions are you most often asked?

Financial planning is a fairly simple concept. There, I’ve said it! It is at least in the eyes of clients, who consider it broadly as sorting out their money stuff. Of course, effective financial planning is anything but simple. It takes a lot of expertise, talent and a really good process to transform the financial lives of your clients.

Towards the end of last year, FT Money carried out a piece of research among 300 UK clients of financial advisers, with the aim of uncovering their most common questions and the solutions that advisers are offering. The survey results were quite insightful and would likely be relatively similar if carried out in Ireland.

For a start, the top 10 issues that clients want to discuss with their advisers are in the following areas,

  • Retirement/pension planning
  • Tax planning
  • Brexit/political uncertainty
  • Inheritance tax
  • Future financial planning
  • Investment returns/dividends
  • Portfolio review/diversification
  • Global politics/likelihood of market crash
  • Pension drawdown
  • Pension transfer

Maybe no great surprises in the above? It is interesting though that there is nothing directly relating to protection of wealth in there – does financial security fade into the background during times of economic growth?

However, there were four questions that featured frequently in the concerns of clients – do they reflect the conversations that you are having with your clients?

 

Can I afford to retire?

This was the number one question that FT readers wanted to discuss with an adviser, with more than 20 per cent of respondents naming retirement and pension planning as their top concern. With state pensions providing only basic subsistence support to people, clients are rightly focused on how they will live when their income earning days are behind them. Retirement planning is a critical element of financial planning today through both the accumulation and decumulation phases of life. No surprises here!

 

How can I pay less tax?

Tax planning was cited by over 17 per cent of readers as a topic they wanted to discuss with a financial adviser. Many financial planners today are expert in tax matters and indeed many of you have additional taxation specific qualifications. This all makes a huge amount of sense as tax is a significant drag on wealth accumulation and good tax advice has a huge impact. Being a personal tax expert is a necessary requirement for advisers today.

This is an area of potential improvement for some advisers. Do you shy away from giving tax advice and guide your clients towards an accountant or tax adviser? Is this always the right approach? Can you really give expert financial planning advice without being a personal tax expert? I’m not so sure…

 

How can I reduce the impact of inheritance tax?

In addition to general concerns about tax, inheritance tax (IHT) was also a key, specific concern for readers. Although only 5 per cent of estates nationally (in UK) pay the tax, many readers nevertheless fear the impact of IHT — and need an adviser’s help to understand the system.

Of course you are all aware of how penal the Irish IHT system is, with thresholds slashed since the economic crash and IHT rates increased. When you layer increased wealth over the last decade and the recovery of property values, IHT can take a big chunk out of estates. There are ways of reducing these tax bills – you play a really valuable role in helping your clients to take advantage of them.

 

How will Brexit impact my finances?

Obviously this topic is not going to be of such concern to Irish clients. What it does demonstrate though is that clients rightly worry about significant external events beyond their control. One of the most important roles for you as a financial planner is to reassure clients and to keep them focused on the plan. You are all aware that irrational behaviour by investors is often the single biggest drag on growing wealth. You are the voice of reason, helping clients to keep a long-term perspective.

 

While these may be the most common questions that clients ask, one important point comes to the surface. The questions that clients have are about themselves and their money, not about the products that they hold. This further confirms the value that you add is as an expert financial guide… and not as someone who chooses the best products and times the markets.

Are you ready to answer the big questions of your clients?

How good are your review meetings?

As more and more advisers shift the focus in their client interactions away from products and more towards a broader and more valuable financial planning proposition, the profile of their income is also shifting from a reliance on initial commissions to a flatter and ultimately more valuable ongoing income stream. To justify this recurring income stream, regular review meetings with clients are becoming far more important events.

It’s not too long ago that I used to wince when hearing about the review meetings of some advisers, where the client opting not to have a meeting was seen as a victory. The review meetings of these advisers were haphazard and added little value to clients. Thankfully these are mostly in the past.

One of the challenges for advisers is that they hear so much about the importance of developing an engaging Client Value Proposition. As a result, a lot of time and effort has gone into identifying where clients are experiencing value, the advice process that is being used, the client services that are provided and indeed how all of this should be paid for by clients. This is great, but the focus tends to be around the initial (year 1) engagement with clients.

I can tell you as the client of a financial planner that I can’t at this stage remember our initial interaction. But I remember clearly our last review meeting, and I’m also very clear about what we will discuss at our next meeting. And that’s the way it should be. The initial advice stage set me off on the right path; the review meetings keep me on it.

With some advisers, the focus is heavily weighted on attracting new clients, at the expense of minding the existing ones.  However having a brilliant review meeting is the means by which you’ll lock in those clients year after year, and as a result enjoy an ongoing income stream from the clients.

As a core part of your initial engagement with a new client, it makes sense to explain to them in detail what will happen every year into the future. It’s not enough for review meetings to be positioned as a “by the way” 10-second conversation at the end of the initial product implementation.

What should a review meeting include? Of course the financial plan should be central to the meeting – have the client’s life goals changed, do they want to explore a different future? Have they the financial capacity to live the life they want? There is also the fairly standard (and necessary) tasks of reviewing a client’s portfolio, getting up to date values and potentially even writing a short review report. And you definitely should explore further protection needs based on changing circumstances etc.

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;

  • Their wealth growth.
  • Their improved future capability to live the life they want.
  • 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 in actual euros.
  • The actual money saved in euros 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. This is an area that many clients continue to struggle with. By getting clients on the right path here and reviewing it with them, you can add enormous value to them.
  • Reviewing future cashflow plans with your clients each year adds tremendous value. This can completely change the conversation, enable you to look at “what if” scenarios and approach the client’s financial affairs in a very engaging and collaborative way.
  • 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 centred right at the hub of their financial affairs.

Review meetings are also the opportunity to remind your clients of the work and interactions you’ve had with them throughout the year – the rebalancing of their portfolio that you carried out, the interim meetings you had, seminars you invited them to, the content you sent them etc. How can a client question your ongoing fees when they realise that you are actually providing value to them right throughout the year?

So place review meetings at the heart of your proposition. Make them memorable and ensure your clients come back to you year after year.

6 financial apps I use all the time

Every summer I give one of these articles over to the subject of apps that I use all the time. This year, I’m taking a slightly different slant on it, and am looking only at apps that I use in my financial life. These cross over both my business and personal lives, as some of the apps are used in both.

I’ve excluded my online banking app from the list below as everyone has different banking relationships. As it happens I bank with Ulster Bank and I think their online banking app is excellent – it is extremely easy to use and has a number of really clever services within it such as accessing cash from an ATM when you don’t have a card with you etc.

So here goes on the big 6 apps that I use regularly.

 

1. Curve

I started using Curve about 12 months ago. It is effectively a bank card, linked to an app on your phone. What is clever about it is that it becomes an umbrella card for all of your other cards, both debit and credit cards, giving you access to all these cards using your single Curve card. I hate a bulky wallet and as a result of Curve, I only now need to carry one card – my Curve card. Using the app, you choose the account / card that you want your transaction to apply to (e.g. personal debit card, personal credit card, company credit card) and you can change this in seconds between transactions. It also has a natty feature that if you forget to apply a transaction to the correct credit / debit card, when using your Curve card, you can “go back in time” and reapply a transaction to the right account later.

Details of all of your cards are not stored on your Curve card which is important if it falls into the wrong hands. Also you get immediate notifications (if you want) every time the card is used (which is a great security feature), and you can block your card yourself via the app too.

 

2. Xero

I was introduced to Xero, an online accounting system a couple of years ago. It has had a transformational effect on the financial management side of my business. I now have real-time profit & loss statements, balance sheet and a host of other useful reports that are available at the press of a button. All my invoicing and bank reconciliations are done through Xero, as is management of expenses. My accountant and I can both view the up to the minute real time information about my business, I’m saving hours every month with this software and have much better information available to me.

Specifically with the app, a great overview of business bank accounts, invoices and purchases is provided. I’ve full view of my outstanding invoices in the App and other important information. I now have all the information I need, and the time spent on “the books” is now a fraction of what it once was.

 

3. Expenses

I use this app to manage my expenses. When I pay for something in cash and want to be refunded by my business, I simply photograph the receipt and let the app get to work. It extracts the information from the receipt (supplier name, amount, date etc.) and updates Xero, so that everything is accounted for. It’s not always 100% correct so needs to be monitored, but it does the lion’s share of the work. It also recognises similar payments and “learns” how similar bills should be treated.

The days of filling out expenses sheets are long gone. The app is also very effective where there are multiple team members submitting expenses and makes the whole process of authorising expenses much easier.

 

4. Stripe

I’m a relatively recent user of Stripe and this came about when an adviser recently asked me could he pay me for a service by credit card. This prompted me to go looking for solutions. Literally an hour later I had a Stripe account set up (which receives credit card payments) that was fully integrated into Xero. So now I can receive payment on any invoice by credit card, and my accounting system knows about it. The Stripe app is great, providing notifications when money is received and giving me all of the information I need to manage this new form of payment.

 

5. Revenue

Am I serious? Yes I am! I think the Revenue app (RevApp) is great, allowing you to log a whole range of expenses throughout the year (health expenses etc.) which makes completing your tax return very easy. You can also log a whole range of other tax relievable expenses (e.g. the home improvement tax relief scheme) and you can get lots of useful information about your tax records.

 

6. Bloomberg

Completely different to all of the others as this is one I use for information only. It provides great information on the markets when I’m simply looking for a snapshot over a particular time period. I find their business news notifications to be really good – they tend to be very interesting and are not so frequent that they become annoying. I’m particularly enjoying their daily Brexit Bulletin – but this is turning out like a movie car crash in slow motion…

 

These are my “go to” apps. Why not try one or two of them out and see if they can make your life a little easier too.

What makes some financial broker websites world class?

Creating a world class website is within the reach of financial brokers. The secret to it is to follow some simple guidelines, put a lot of work into creating excellent content and then pay a very high level of attention to the detail. If you’ve a fairly basic website or one that hasn’t been revisited in a while, here are some tips that can help you get there.

 

Keep it Simple

The days are long gone of auto-loading videos, animated graphics and the latest technical fads. The best websites today are ones that guide the user quickly to what they want and communicate in concise, engaging content.

 

Make it Easy to Navigate

Don’t make the user have to “work out” where to find the information they are seeking, make the navigation as simple as possible. The main navigation bar, which should always be at the top of the page and not down the side, is really critical. It is through this that most users will enter the site from the homepage, so think this through very carefully. Think very carefully of what to include on this, as it typically will only cover 5/6 site areas. And then consider very carefully what you are going to call each section. Use standard terminology that makes sense to people, such as About / Our Services / Contact Us / News or Blog.

 

Focus on Financial Planning

I look at a lot of financial brokers’ websites. Probably the biggest bugbear that I have is the lack of focus on financial planning. This is the extremely valuable skill that you bring to your clients, helping them identify their financial objectives and then finding and implementing the best solutions to help them achieve those objectives.

However many websites talk only about financial products. This makes you appear as a hard-edged salesman, selling the latest and greatest products, not doing justice to your skill at all. I strongly suggest that you develop a very prominent, specific section in your website about financial planning and explain the value that you will bring to clients.

 

Reduce your Content

Long explanations and technical details about every product available will just bore users. Explain in very brief, clear language the services that you provide. An alternative approach is to identify some client personas and set out (again in brief, clear language) how you meet the needs of these different personas.

 

Use Visuals

Using images is great. There are literally millions of stock images for sale that you can use. However if you really want to stand apart, spend a bit of money, hire a professional photographer and get some original imagery. This can be a real wow factor!

 

Commit to your News / Blog section

This section is for regular and relevant blog entries that educate users and demonstrate your expertise and these play a number of valuable roles. First of all, they draw people to your site after you share a link to a useful article you’ve written. This of course in turn opens up the possibility of the user finding out more about you and the services you offer.

Also search engines (like Google) love fresh, original content. In fact new, authentic content that engages users and in turn is endorsed by them through sharing it, liking it or commenting is one of the most important drivers of bumping you up the search results. This is of course on top of the value that clients and prospective clients will get from knowing that you are a financial broker with a finger on the pulse and demonstrating your expertise and ability to solve their problems.

 

Show Authenticity

Client testimonials, particularly where the name (and better still a photo) of the client is included, are a very valuable asset. These give you credibility, as do links to any reviews etc. Having a social media presence also adds credibility, so have clear links to your LinkedIn profile and other social media assets. Obviously then make sure your social media profiles are of the same high standard!

 

Have Clear Calls to Action

Users will come to your site for a range of different reasons. Some may be simply browsing around, others may be looking for specific information, some may want to buy and may be looking for your phone number. Try and appeal to all of them by having a range of Calls to Action. The last group are easiest – make sure they can easily see your phone number without having to go looking for it! For the others, have Calls to Action that will enable them to stay in touch with your business, even after they leave the site. Do you make it easy for people to connect with you on LinkedIn from your site? Make it easy for them to subscribe to your newsletter. Maybe offer an online Chat facility to answer their questions there and then.

 

Mobile is Key

More than half of searches happen now on mobile devices. Your site simply must be responsive, ensuring that it is easy to read on a phone or other device. People today have lost patience with having to “pinch” the screen to go looking for the information that they want – this results in a terrible viewing experience. Responsive sites alter the screen layout to suit the device on which it is being viewed – a “must have” today.

Also in relation to mobile, if someone is looking at your site while out and about, very often they are simply looking for contact details. So again make sure your phone number is very visible.

 

For some financial brokers, these changes will mean a few hours work. For others they might mean a new site. For everyone though they are worth it. Research of financial brokers is happening more and more online so you want to make sure you are demonstrating why you are the best choice for prospective customers!

 

Just bought a business? Turning 2 into 1

So you’ve made the big move… Your business is in growth mode and you’ve decided to accelerate that growth by acquiring another advice business that’s for sale. The price has been agreed, as has the structure of the deal relating to the earn-out period and terms for the owner of the acquired business.

While this is a big step and great progress to get to this stage, there’s still a lot of work to be done. Because according to a 2017 Harvard Business Review report, the failure rate for mergers and acquisitions (M&A) sits between 70 percent and 90 percent! A very scary figure… Now of course this figure applies across all industries and you can argue that’s it’s different when buying another financial advice business. But there is still lots to consider if you want to integrate the acquisition successfully and maximise the value of the deal. So where do you start?

 

Have a very clear strategy

Of course you likely will have given this a lot of thought before you get anywhere near the integration phase. Hopefully you have a very clear vision of what you are setting out to achieve. Does the acquisition simply increase the number of clients of your business, or is it opening up new markets? Is it giving you capabilities in new areas of financial advice, or is the acquisition delivering significant cost savings when the two businesses are put together?

Know where you are going and what it is that you are trying to achieve, as your strategy should be the guiding “North Star” for your integration process.

 

Build a very robust plan

You need to have an integration plan for every area of the business. If you want the integration to be successful, this plan has to be developed carefully and thoroughly, building a clear roadmap for every key service area – your advice process, your service proposition, your compliance process and right through to your HR processes. You have to ensure that you have the required resources in place to actually develop and follow through on this plan.

If instead everyone just blindly “hits the ground running”, there is a strong likelihood of a significant fall-off in performance and even chaos a little bit down the road! To avoid this, give some thought to the following areas before you set out to integrate the two businesses.

 

Consider culture

This is an area that the leader of the business needs to consider carefully and be very involved in. Are the cultures of the two organisations similar or are they quite different? What is the desired culture of the merged operation going forwards and what are the main steps to help you to start building this culture? This will need clear leadership and involvement of all of the staff.

 

Good integration takes time and focus

It won’t just blindly happen. Your carefully developed plan will need to be delivered in a structured way. This will take the time and focus of some key people – maybe you, maybe members of your team. You need to recognise the cost of this as the focus of these people for a period of time will be on integration of the two businesses, rather than increasing the income of the business. However this short-term cost will definitely pay dividends in the longer-term.

 

Who are the right people to carry out this work?

If you want the integration to happen successfully, you need to have the right people carrying it out. There can be a temptation for the leader of the business to lead the integration work. However it may be that their attention is better spent elsewhere, for example leading the commercial focus of the business for a while and guiding the expectations and requirements of clients and business partners. The leader of the business should be close to the integration, but does not necessarily need to lead it. Sometimes there appears to be an “easier” solution and the integration process is passed to someone who “is not that busy”, but who may be completely unsuited to the role. This is a recipe for disaster.

The integration role is best carried out by someone who is very structured in their work and who is capable of keeping a project with multiple strands on track. If they have very high credibility in the office and strong relationships with colleagues, this again significantly enhances the likelihood of success.

 

Follow through

Finally, don’t get side-tracked by current business pressures, see the integration through to the end. That is not to say of course that you won’t change tack at times, but when this happens, tweak your integration plans rather than leave them behind.

 

A good integration process will help you ensure a successful result after your acquisition. Follow it through relentlessly and you can reach out confidently towards your goals.

10 tips for brilliant client seminars

Financial brokers are always seeking out different ways to keep your clients engaged throughout the year. Many of you send out regular updates and newsletters, you of course meet clients face to face and some of you use technology to deliver excellent webinars and conference calls.

A popular marketing tool is client seminars, as these offer great opportunities to interact and engage with lots of clients. When carried out well, seminars can be significant brand enhancers. On the flip side though, when they are not done well they can significantly undermine your brand. Quality needs to sit at the heart of every aspect of them.

Here are some thoughts on delivering high quality seminars.

 

1. Don’t make it a once-off event

The best events are the regular events (this being even once a year) that clients really enjoy, get value from and look forward to the next one. Not easy to accomplish! But if you spend the time planning a regular event from the outset and think through themes that will carry forward to future events, this will always be much more powerful that a once-off event that in reality will deliver little long-term brand value.

 

2. Focus on quality throughout

Focus on quality throughout – the venue, speakers, the messages, room layout, presentation template, food, invitations, takeaway packs etc. Every aspect needs to be high quality. Spend a little extra and really wow you audience. This will make your event memorable and will encourage them back again.

 

3. Choose speakers carefully, even better if they are unexpected

The quality of the speakers is of course a really important ingredient. This is not a time for sales pitches, you want to add value through informing and educating (see point 6 below). In a previous life in 2008, we hosted a seminar for Financial Brokers at which the CFO of Ryanair spoke about cost cutting. At that time cost cutting was the no. 1 challenge for almost everyone in the audience. We got huge kudos for this seminar, as it was seen as providing information that was really valuable to the audience, at no direct gain to the company that was hosting the event.

 

4. Cut down your number of slides, and then cut them down again!

The number one presentation killer…… You have a very good message to deliver but you can’t understand halfway through why people are starting to nod off! More often than not, it’s because your presentation is just too long. The audience has just got bored!

A rule of thumb I use is to allow at least 2 minutes per slide (excluding the cover and end slides). That means if your presentation is 20 minutes long, there definitely should not be more than 10 slides.

 

5. Reduce the content on each slide

Assuming you will present yourself, don’t have more than 5/6 lines of text on a single slide. The audience have come to listen to you the speaker, not to read your slides! Otherwise they could just have asked you to email them a copy of the slides the next day. You are the main act and your slides are simply a visual reminder of what you’re saying, not the other way around!

If your presentation requires the audience to be given every detail, give them a hand-out at the end – how bad is it if they ring you the next day with a question?

 

6. Make your presentation engaging and educational

As mentioned earlier, your goals are (or should be) to inform and educate. Ensure your message is crafted with these in mind. Then you need to make the presentation more engaging, both in terms of your spoken message and any supporting slides. Use simple visual prompts by bringing in graphs and diagrams to make points. A single video (no more) can add a lot but only if it is very relevant.

This can be a lot of effort but is really worth it. If you don’t have the PowerPoint skills yourself, use someone who does. You’ve gone to the bother of getting a room full of people together, it is so important now that you engage the audience fully. Oh and talk to your audience, not your slides! If there is an opportunity to interact with them by questions / looking for a show of hands, then this is even better.

 

7. Make sure everything works at the venue

Check out the venue beforehand and then on the day, get to the venue with loads of time to spare in case time is needed for any unforeseen problems. Nothing will damage your confidence and ultimately the delivery of your presentation more than rushing to try and sort out issues…. If possible, have someone there as a support to deal with any potential problems for you.

Is there enough parking nearby? Is the sound good enough in the room and are there enough chairs? What about the temperature in the room? Also, do a complete run through of the entire presentation with someone at the back of the room – not just the first few slides. Can they read the slides or is the typeface too small? Is the projector strong enough? Do all the links in the presentation work and will your video play properly? Once you see everything working perfectly, you will relax and can go and greet your guests.

 

8. Practice, practice, practice

I know, this is really obvious but so often ignored! The benefits of practice? Well first of all, the more prepared you are, the more confident you will be and the better your delivery will be! How many times have you finished a presentation and thought “I meant to say…… but just forgot”. This is less likely to happen if you practice. If you practice, you are more likely to stay on track in terms of the message and also your timings, so you’ll probably finish the presentation stronger.

 

9. Spend time thinking about the Q&A

What are the likely questions and how will you respond? What are the potential curveballs and how will you deal with them? How will you deal with any unexpected and very negative question – think how you’ll cut this off cleanly and quickly and enable yourself to move on. Listen to the news that day. If there’s a current and relevant story, develop a position on it. If you want an easy start to the Q&A, plant a question in the room to get the conversation going.

 

10. Close the event out well

As soon as people start to get up from their chairs, there is a temptation to get back to the day job. Now though is the time to seek feedback that will help you plan future events, either through a feedback form or via a survey. And follow up then personally with people afterwards. You might just have opened up a new line of thinking in their heads that will result in opportunities for you.

 

Quality throughout is the key. High quality seminars, particularly a series of them over a few years can deliver excellent long term brand value to your business.