As an important element of the research completed for Brokers Ireland on “The Evolution of the Broker Market 2030”, we identified 12 areas to be considered by Financial Brokers to help prepare your business for the changing market environment.
We now consider the second action identified, which is the development of a bespoke Client Value Proposition that you can articulate and communicate clearly to all prospective clients in your target markets and that you can relentlessly promote.
The research found that the successful Financial Brokers of the future are likely to be those who are aware of and focused on advice services where significant value will be experienced by their target market clients, and these being in areas that cannot be easily commoditised.
While the provision of product advice and implementation of product solutions will always remain an important element of the work of Financial Brokers, it is likely that digital advancements will expedite the commoditisation of these services. The research suggests that life will get tougher for Brokers who focus solely on product selling.
Financial Brokers sometimes forget the enormous value they add, providing clarity every day to consumers who are otherwise confused amid the complexity in the personal finance space. For example, consider the confusion within the pensions market over the next few years. EPPs are no more, PRSAs are suddenly more attractive, Mastertrusts have emerged, auto enrolment is on the way. Advice will become more important than ever, as people will need guidance in steering through this web of complexity in finding the optimal retirement planning products and investment solutions.
While many Financial Broker businesses today might be positioned as product experts, their offering is in fact much broader than their positioning. The wise counsel, guidance and management of client behaviours that are delivered every day by Financial Brokers are extremely valuable elements of the total service offering. Instead of being positioned narrowly as a seller of technical product solutions where the primary objective is choosing the right product, the expectation is that the Broker of the future will instead position themselves as the provider of valued financial guidance and ongoing behavioural coaching to clients.
The research suggests that the most successful Brokers of the future will be those that have a very simple business model, excellent processes and are likely to provide a full range of financial planning and advice services, including product advice as an important element – but not the only element. Their proposition will be based around providing a financial plan to a client and then delivering this plan in collaboration with the client over many years.
This is a common theme around the world. In an interview during the research, the Personal Investment Management and Financial Advice Association (PIMFA) in the UK said, “The growth areas are in financial guidance and planning. While there always have been and will be wealth management businesses, these are all about the money. Financial planning is more about non-financial issues, it provides services around guidance, behaviours, and the well-being of clients. Unlike managing the money, these areas cannot be [as] easily commoditised or digitised”.
There are some specific actions for you to carry out to develop a winning proposition that is future ready.
Start by writing down all the services that you offer to clients. Then critically review the list. Are you doing enough for clients? Are there other services that you should add or are there services that you are currently providing that you are not currently giving sufficient weight to?
Then consider the advice services that clients receive most value from, and that cannot be easily replicated by digital solutions. With the growth in comparison tools in recent years and more recently the surge in Artificial Intelligence (AI) solutions, this list is getting longer, particularly around the product elements of your proposition. But machines cannot tap into emotions that you encounter every day with your clients – worry, uncertainty, doubt, over-exuberance, greed, over/lack of confidence etc. You have the unique skill of identifying the traits of each individual client and guiding them accordingly.
Then you should develop out each of the advice service areas, setting out the features and benefits of each and the value that clients will experience. Being ready to articulate the value of your proposition is the first important step in being able to communicate it effectively to prospective clients.
The final step is to start shouting about it from the rooftops! Promote the breadth and value of your services through all your available marketing and client communication channels. It’s time to inform your target market of why you are the right Financial Broker to meet their needs.