Are you pulling the strings for effective partnerships?

Business owners and wealthy individuals today utilise the services of a whole range of professional service providers. They often have relationships with an accountant, a solicitor, a tax adviser and a financial planner. Pulling all these disparate pieces together into a coherent strategy is a tricky business, and I suggest that the person best placed to complete this work is the financial planner.

The financial planner is the only person who tends to have oversight of everything that is going on in a client’s financial life, both within the client’s personal life and their professional life. The other professionals tend to work with clients on a more transactional basis, while the financial planner’s relationship is different. He / she understands the long-term financial objectives of the client, completes a very detailed factfind of the current circumstances and develops a roadmap to achieve those financial objectives. And the financial planner works with the client year after year.

I personally see my financial planner as the hub of my financial affairs because he provides a broader range of value to me. Yes, he has of course developed my financial plan and ensured I have the right investments, retirement planning and protections in place – I’d expect no less. But he also guides me in relation to much broader financial-related issues.

I’ve written on many occasions about the range of value-added services that you can provide, beyond the basic plan and products that you arrange. Just to mention them again, these include supporting your client or referring them to a specialist in the areas of,

  • Budgeting
  • Cashflow planning
  • Tax advice
  • Advice about bank accounts
  • Wills and Enduring Powers of Attorney

All of them are really important to get right for your client. And then there’s also the big opportunity for your business…

 

Build effective collaborations

It’s equally important to carefully manage the relationships with the other professional advisers. Firstly, you want everyone to collaborate effectively in the very best interests of your mutual client. Then with a more self-interested hat on, you also want to really impress these other professionals, with a view to them seeking out your services in the future. In my travels in out of the offices of financial planners across the country, it’s in this second area that I sometimes see planners selling themselves a little short and not driving home their potential future opportunities…

Here are a couple of ideas to help build stronger collaborative relationships with a professional network.

 

Communicate your value time and time again

A goal should be to get in front of the network partners time and time again to remind them of the value that you can add and to get regular client referrals. There are many ways you can do this; here are a few examples;

  • Add the partners to your own communication programme: Connect with the partners on LinkedIn and also get their permission to be added to your newsletter subscriber list. Let them see the expertise and thought leadership that you have to offer.
  • Develop bespoke presentations: These are for the initial meeting with the partners and should focus very much on the role of the accountant and how you can assist them in their own role. Personalise each presentation to the role of the particular partner’s area of specialism – for example the presentation to a tax partner should focus on pension reliefs, tax efficient protection products, tax efficient investing and other tax angles that you can bring to the table. This shows knowledge, understanding and willingness to engage in their areas of challenge with their clients.
  • Case Studies: Prepare a number of case studies of innovative solutions that you’ve implemented and know are relevant to challenges that are typically faced by these professionals. Don’t leave them guessing as to how you can help, join the dots for them…
  • Briefings for partners: Keep your network briefed on issues within the life and pensions industry that they need to be aware of, but may not be that knowledgeable. This can be through email contacts, lunchtime meetings or other such channels.

 

Develop joint marketing activities

And then you need to also promote your network and help their bottom line. First of all, refer clients to them whenever possible. If you give them new clients, they are certainly going to try harder to reciprocate. Then offer them the opportunity to include guest posts in your newsletter. This gives them welcome exposure to your clients. You can then look at hosting joint events to which you both bring clients, take a speaking slot to impress the guests, all of this with a view to both you and your network partner meeting the other’s clients and building new relationships.

 

Prove your value with clients

Of course the biggest barrier to professional network partners referring clients to you is fear. Fear that you will somehow mess up and as a result cause difficulties for them with their client. So when they do take the leap and finally refer a client to you, it’s imperative that you do a good job (as you do) and then make sure your partner is aware of it. How do you do this? You might seek a testimonial from the client, which you then share with them. Alternatively you can email the client a few weeks after the end of your work with a short client satisfaction survey – again you will share the results with your network partner.

These are just a few thoughts on building profitable and lasting relationships with a network of professional partners. Build their trust, remove their fears, align yourself to their proposition and demonstrate your value time and time again. And then you will be well on the way to breaking the back of that search for new clients.

Why your clients leave you.

A previous article that we wrote about when it’s time to fire a client drew a fair bit of comment… It proved to be a situation that many financial advisers have experienced. However, now it’s time to take a look at the flip side of the coin – when clients leave you.

We’ve set out below some of the reasons that clients might leave you, and what you can do to prevent it happening.

 

They lose the feeling of love

You are busy, lots of new clients coming through the front door and business is great! However at the same time, you need to guard against existing, valuable clients quietly slipping out the back door. Have a really clear activity plan for all of your valuable clients, making sure that all of them continue to feel the love every year.

Make sure your ongoing support packages are really clear in the eyes of your clients. Manage their expectations on what they can and should expect, and then deliver a quality service time after time. Should they expect an annual face-to-face meeting or will you meet them remotely? Or should they expect an annual meeting at all?

 

They lose sight of the plan

The development of a financial plan is a big deal for clients. They get a strong sense of direction and can see a pathway to future financial success. If required, this often entails you putting products in place.

It’s so important to recognise that you’ve simply started the client on their financial journey. Your role then becomes one of an ongoing guide; keeping the client on track for future success and ensuring the plan is continually pointing them in the right direction. If you don’t keep the client focused on the plan (and not just the products), they can fall off the path. And this is where you risk losing them.

 

They don’t believe in the plan

This is a trickier one as you may be sailing along blindly, thinking the client is 100% committed to the plan. It is worth getting positive affirmation from the client that they are happy with the plan, that it comprehensively covers all of their aspirations and concerns and that they are fully satisfied with the proposed strategies and solutions to achieve the plan.

Of course this becomes a lot easier with cashflow planning as the client can see before them the progress they are making, the further progress needed and whether they are on track or not. This clarity builds their financial confidence.

As part of this, it’s also important to recognise that you may be unaware at this point of significant changes in their circumstances. These changes may require big changes to the plan. Those check-in review meetings are so important, to ensure the client and you remain on the same page…

 

They don’t understand the plan / and or solutions

People don’t like to feel stupid. Some clients may appear to understand everything you tell them, but in fact may be bamboozled by the language and terminology that you use. Be careful that you talk to them as clients, keeping your language simple. Don’t talk to them with language you use with fellow professionals as your client may not understand you. This will undermine their trust in you and rather than appear stupid, they may prefer to deal with someone who they understand and connect better with.

 

They think the grass is greener elsewhere

Some clients leave because they believe another adviser will get better results for them. If another adviser is developing a better, more comprehensive plan for your client, you’ve got a problem. However if another adviser is promising “better returns”, you need to confront this. Clients can get greedy and blinded when confronted with unrealistic opportunities. You need to constantly remind your clients that you (and other advisers) have no control over markets or timing and that your role is identify a portfolio that reflects their specific needs, and not simply to suggest a portfolio with the highest potential returns (and risk). You need to remind them of the valid expectations they should have and how this relates back to the financial plan.

Some clients will leave anyway. Keep the door open to them – they may return when they recognise the grass was greener elsewhere.

 

These are just some of the reasons clients leave you. Ongoing, open communication with your valued clients is the key to preventing them slipping out the back door. Getting new clients into your business is hard work, keeping them there requires the same level of energy and attention.

You’re fired

It’s hard enough to get clients in the first place, I hear you say… But sometimes relationships just don’t work out and it’s time to part ways. This arises relatively infrequently in personal relationships, and it also arises fairly rarely in adviser / client relationships. But just as it doesn’t make sense to stay in a bad marriage, it also doesn’t make sense to stay in a toxic or doomed adviser / client relationship…

 

Relationships can turn sour with clients

We’re not talking here about the odd grumble that a client may have. When markets take a bit of a dive, the natural reaction of a client is to get nervous. Some will have an open conversation with you about their concerns, others will stew silently, some might lash out a bit at you. There’s nothing wrong with any of these reactions – your skills as an adviser need to stretch to noticing client reactions, dealing with them accordingly and bringing your client’s attention back to what matters – their financial plan.

Instead we’re talking here about the client who is simply never happy – your service is too slow when it’s not, your charges are too high when they are in fact fair, their fund performance is not good enough when it’s not your fault and the client also doesn’t want to take any risk. If the client can find an opportunity to moan, they immediately take it. When your phone rings and your heart sinks when their number comes up – everyone knows the feeling.

Let the client go – fire him or her. A client who doesn’t recognise your value is no good for you or your business.

 

The time comes to break free

I was chatting recently to an adviser that I really respect about a specific client of his. It’s about the tenth conversation we’ve had about the client, who is simply never happy. My adviser friend has jumped through hoops for him over the last few years – regular draining meetings and phone conversations, numerous excellent and time consuming reports, meetings arranged with providers, exceptional service at every turn. All the time having developed an innovative financial plan for the client, that is on course for delivery via a solid investment strategy. And all of this has been delivered for a very reasonable fee.  There has never been a word of thanks or even grudging positivity from the client.

The adviser has ploughed on as the annual fee, even though extremely reasonable is not insignificant. The adviser didn’t want to lose the fee… until recently, when the client started arguing over the fee level (again). The adviser told me that a few weeks previously, he fired the client. He told the client he would not deal with him any more and would facilitate fully his move to another adviser or organisation of his choice.

The client took it badly, told the adviser he was going anyway and went off to talk to other advisers. The faraway hills were not greener – the client soon arrived back a bit sheepishly saying that he(!) had reconsidered and would stay on the existing fee. The adviser said he was no longer a client and wouldn’t be taken back.

 

Don’t look back

Yes the adviser misses the fee a bit. But the cost of that is far outweighed by the liberating impact that getting rid of the client has had, both for him personally and for his business. He knows his proposition is excellent, his fees are fair, his communication is excellent and his results for clients are as good as can be achieved. However this experience caused him to re-evaluate what he does and question that maybe the fault lay with him as the adviser and not the client.  Having done this exercise though, it re-confirmed to himself that his offering is excellent. He has more time for other clients, renewed confidence in what he offers and a certain pride that he stood up for his own principles. He doesn’t dread phone calls, and the slog associated with that particular client is gone. All of this is worth a lot more than a fee.

I’m not suggesting that the decision to fire a client is easy and it should never be taken lightly. But do you have a client who is dragging you down, takes up too much time, keeps you awake at night, moans about you to others and makes you question yourself and what you do? Because if you do, you should consider whether they deserve a seat on your bus.

 

Every day you help your clients to live the life they want. Do yourself a favour and live the life you want – don’t suffer clients who don’t deserve you.

Prepare the ground to attract new clients in 2021

I quite regularly get phone calls from financial advisers who are hitting a wall when it comes to attracting new clients. Some are looking for a quick fix, the single activity that they can then get to work on, in the hope of getting new clients on board. This has become a significant issue for those financial advisers who rely on being “out and about” and highly visible in their communities as their main route to new clients. They are really struggling in this socially distanced world where both they and their potential clients are now working from home.

Unfortunately there isn’t a silver bullet to address this challenge. Instead the road to success is through a structured plan of activities delivered brilliantly. In this piece, we are focusing on some important themes you might consider when building up that plan.

 

Put your target markets at the centre of your plan

A generic plan that can be applied across all segments of your potential client population is simply not going to cut it. Your plan must zero in on the specific target markets that you are seeking to attract.

First of all, you need to know and be able to clearly articulate who is in your target market… and who is not.

Once you understand who your target markets are, you need to understand their personas and the characteristics that make them unique. How do they think, how do they buy services, what do they read and what do they engage with? Once you start to build that picture, you can then craft your Client Value Proposition (CVP) to align better with their particular traits. You can ensure that the services you deliver will meet their needs.

You can then identify the right set of marketing activities to actually attract and engage these specific audiences.

 

Actively use your CRM

Your Customer Relationship Management (CRM) system should be the first port of call when you start working each day. This is where opportunities should be captured, marketing activities to individual prospects should be scheduled, the potential of individual leads should be scored and all touchpoints should be tracked – among many other data points.

For too many advisers, the CRM system is being used simply to store contact details for clients and to contain information on policies as downloaded from product providers. This is a missed opportunity…

Talk to your CRM vendor or peers who use the same system, get them to walk you through the sales and marketing capabilities available to you and dedicate time (your own or one of your support staff) to driving real value from your CRM.

 

Use your network

In these socially distanced times, your network of contacts is such an important asset. Of course the opportunity to mingle with them is not available to you, but there are still ways to leverage your network and most importantly, to remain on their radar. Now is not the time to go quiet – if you want to retain them as important sources of referral business, you need to work harder than ever on communicating effectively with them, and constantly remind them of your expertise.

 

Commit to consistent marketing

And this really is the key to preparing the ground to building new client relationships in 2021. Now is the time to consider all of the tools available to you to build those new relationships. Review your proposition, look at every aspect of your online presence and the tools you are using to carry out meetings remotely – can you improve how these might be perceived?

And then look to communicate relentlessly to stay relevant and visible. Look for opportunities through email marketing, using social media (in particular LinkedIn) and through online webinars and events.

 

With a few weeks to run before the start of 2021, now is the time to get yourself set up for a successful year on the new client acquisition front.

 

What advisers value in the advice they give

I took the opportunity this week to grab a coffee and have a good read of an excellent piece of research that was issued by PortfolioMetrix at the start of the summer. The research is called “The insider’s guide to the value of advice” and can be accessed here. It’s well worth a read, as it considers the views of almost 200 financial advisers in Ireland, UK and South Africa in relation to this important subject. It also overlays the research with further good insights from both advisers and from PortfolioMetrix, along with links to other relevant research and articles.

So what are the nuggets that the research tells us?

First of all, it was useful to see on one page the financial value of advice as identified by other research carried out by a number of large, international organisations such as Vanguard, Russell Investment and others. This external research reveals,

  • Advisers add between 3%p.a. to 4.4% p.a. in net returns for their clients.
  • Clients who enjoy an ongoing relationship with a financial adviser had pension wealth that is 50% greater than those who only got once-off advice.
  • The savings of an advised client will be 2.73 times greater over a 15 year period versus a non-advised client.

The PortfolioMetrix research asked the advisers to pick, and then rank, their top five attributes from a suggested list of twenty. As it turned out, only seven of the 25 attributes were selected by more than 25% of the respondents. Interestingly, there was one standout attribute that was selected by 76% of the respondents; Empathy. This is the ability to put yourself in the client’s shoes and really understand what is important to them. It is about gaining their confidence and building trust. As one respondent added in their commentary,

Without empathy no amount of professional qualifications is going to help you engage with clients

The next six attributes that were also chosen by more than 25% of the advisers were;

  • Life Goals (49%)
  • Peace of mind (47%)
  • Simplify (47%)
  • Personalised financial plan (41%)
  • Consistency & continuity (39%)
  • Behavioural coaching (36%)

Each of the 20 attributes were also identified as belonging to one of four categories which revealed that,

  • Soft skills are most important (35% of advisers)
  • Building the financial plan (30%) is next
  • Putting the plan into action (20%)
  • Ongoing service (15%)

The conclusions of the report cautioned though that It is also worth noting that what advisers think is valuable to their clients is not always matched by what their clients think. A study by Morningstar revealed a sizable disconnect between the views of advisers and their clients. Clients undervalued behavioural coaching whilst advisers overvalued understanding the client’s unique needs and undervalued maximising returns. The takeaway from this is that once you have articulated your own value proposition, it is worth running it past your clients to ensure it resonates with them.

This is a current and valuable piece of research that is worth reading by all advisers.

 

 

Making a family-run advice business work for all your employees

I’ve been very fortunate in the past 12-18 months to work with a great advice firm in helping their employees to develop Personal Development Plans. This firm is really committed to supporting their employees’ growth in both their current roles and in their careers overall.

As part of the work, I’ve had a series of 1:1 meetings with each member of staff. One (let’s call her Jane) is a relatively recent recruit, who opened up to me in quite a bit of detail about why she had changed jobs. After all, her previous employer is a well-regarded and respected family-run advice business. But herein lay the problem – the way her previous employer’s business was run didn’t work for Jane, who was not a member of the family. As a result, they ended up losing a highly effective and valued member of staff, despite their best efforts to retain her.

So, what can family run businesses learn from the experiences of Jane and others like her? While I’m not for one minute suggesting that your family run business displays all or even some of the following characteristics, these areas are worth checking off.

 

Have a clear strategy

Quite a number of family businesses start very small and then grow organically over many years, sometimes into very substantial businesses. Because there is often not a formal corporate structure in place, the strategy for the business can happen on the hoof and simply evolve over time.

This is all well and good for the family members who will have many informal chats at family dinners about where the business is going. However this excludes non-family members of the team, who are then operating in the absence of a strategy to get behind. They don’t share the same sense of purpose that family members will feel, and as a result feel disconnected from the ambitions of the business.

 

Don’t have two sets of rules

This is probably the biggest gripe, when it happens. Favouritism of family members in your advice business will quickly alienate the rest of the team. Your family business is exactly like any other business, needing set policies for everyone in relation to working hours, holidays, client entertaining etc.

The same also applies to behaviour around the office. You should expect the same standard from all in relation to dress code, language used and other behaviours. Letting standards slip with family members is a sure-fire way to driving a wedge between them and other team members.

 

Defined processes are a must

How work is actually carried out should be the same for everyone. Whether this is in relation to your advisers or your customer service team, standard processes should be used by all. This might apply in areas such as the recording of advice, the quality of files, the handover from consultant to internal people and the ongoing service to customers. All of these areas should be delivered in a defined and consistent way by every single member of the team. Otherwise, frustration will reign.

 

Career paths for all

It can be all too easy for family businesses to just rock along without any great career plans in place. After all, sure won’t Johnny or Mary just take over the running the business when mum/dad hang up their boots?

That unspoken career path is fine for the children of the owner, but not for the rest of the team. They want to see where their own careers are going, how they are going to grow in the years to come. Will there be promotion opportunities and a chance to earn more money for greater effort? Will there be ownership opportunities in the business or in a sub-section of the overall business? These are critical questions that your staff members will want clarity about.

 

External oversight

This final area will help the business owner to keep him/herself on their toes! It can be hard to give time to the seemingly less urgent and more subtle issues of the business when the day-to-day pace is frenetic, as is often the case in advice businesses. These areas can end up being relegated down the priority list and never addressed properly.

This is where an external mentor or a board of directors will help you. They will help you to see the wood from the trees, as they won’t get caught up in the minutiae of the business. They will help you to address all of these issues by keeping the development of the full team on the agenda and not letting it slide – they’ll keep you focused on meeting the challenges of your business.

 

Family run businesses play an extremely important and valuable role in the Irish financial advice community. They have delivered many of our brightest and most effective financial planners and advisers. Consider the areas outlined above, and your family-run business can build a broad, effective team and can join that elite cohort.