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?

How are you going to exit your business?

This is a question that continuously exercises all business owners. How are they going to leverage their business to support their desired lifestyle when they want to stop working? This article explores some of the main areas you might consider to increase your chances of achieving your end goal in relation to your business.

What are your goals?

First of all, think about what is important to you in terms of exiting your business. Do you have a particular timeframe in mind? Are you looking to “get out early” and maybe have a long, but relatively modest retirement? Or are you looking to work hard well into your 60’s (or later) and then sell your business to fund a more prosperous retirement? If so, it’s important to be working towards a definite end date. Or are you looking to build a business that will continue after you’re gone, possibly headed up by one of your children, a business that may also support you in retirement?

These are really important decisions to think about now, as they will influence what’s important in achieving your goals. Will it be all about maximising the value of the business on a certain date in the future or are you trying to build extremely deep relationships between your clients and your business that will endure after you’ve exited?

Know what your business is

Now you’ve got to be really honest with yourself. What do you have to sell? Is it actually a business or simply a consultancy service? For some Financial Brokers, they’ve built up a thriving business in which they are the conductor of the orchestra, where the value is not based purely on their own presence in the business. These businesses are obviously very attractive to potential buyers. Then there are other businesses in which the value all revolves around the business owner. Take the owner out of the equation and what is there? While these businesses may offer a nice lifestyle to the owner, they are a far more challenging proposition when it comes to trying to sell.

If you own a business that is based on you as the key asset and you have ambitions to sell it one day, you need to start thinking about how you will develop some saleable value within your business.

Where is the value in your business?

So let’s assume that there is potential value in your business, outside of your own input and that your aim is to actually sell your business. Now it’s time to try and maximise the value of all of your assets. These might include;

  • Financial Assets: An obvious one to start. The main asset that a prospective purchaser will pay for is the future income stream of your business.
  • Persistency: The next thing a buyer will look for is the persistency of your business as this will be a key influencer of the potential future income stream. This will give them a sense of the quality of the “book” of clients that they are buying.
  • Brand: if your brand is well known and seen as a trustworthy brand, there is definite value in this for a buyer.
  • Staff: If you have a team of highly qualified, revenue generating people that will remain in the business, they are a very valuable asset to the business.
  • Market Positioning: If you have a recognised presence in some attractive market segments and niche areas, these may open up new opportunities to a potential buyer.
  • Operational Excellence: If your service proposition, compliance and data management (among other) areas are very strong, these offer great opportunities for a buyer to leverage off the capabilities of your business.

Who will facilitate your exit?

This is another factor that you need to start thinking about well in advance. Who is likely to enable your exit from the business? Once you’ve identified the profile of your potential buyer, you can then work on making your business proposition as attractive as possible to them.

If your aim is that your business will continue with a new leader / owner of the business, you need to start identifying who your potential successors will be. Do you have fellow directors who will buy you out? Or do you have younger, ambitious individuals within the business who might want to take over after you’ve gone? If so, you need to identify these people and start putting in place structures and interim incentives to retain them, and to make it attractive for both you and them for a buyout to happen in the future.

If an external buyer is your preferred route, you need to start identifying particular candidates. Would your business be attractive to current competitors, either in your market segments or geographical area? How would your clients react to this? Are there firms trying to build presence in a niche where you already enjoy a strong presence?

And then, how do you alert potential buyers? Is it a quiet word or a public tender (which will alert your existing clients)? Or can you use the broker networks to gather interest?

How will they pay

Of course one of your main areas of interest will be how much you will get for your business and how the consideration will be paid! Will it be a straight cash deal or will there be some tie-ins into the future in the form of earn outs etc. And how will your firm be valued – are buyers likely to look at recurring income, profits or future cash flows? And which of these works best for you?

Lots of questions to consider! Now is the time to start thinking about them. The more thinking and preparation you do well ahead of your exit date, the more fit for purpose your sale proposition will be. And all of that is likely to result in a higher price for you.

What are the critical areas that you believe need to be considered when selling a financial advisory firm?

Why do clients leave you?

We’ve all cheerily picked up the phone at one stage or another when a client calls, only to suffer that sinking feeling as the client goes on to explain that they are in fact moving their business to another adviser. Often you don’t even get a call, the business just quietly moves. So why do clients actually move their business and put themselves through the hassle of agency transfer letters, bringing a new adviser up to date with their affairs etc.

It’s not about price, or at least very rarely.

The management consultancy firm Bain carried out research some time ago among a large group of accountants, 360 of them in fact. While I know they are not financial advisers, it’s a relevant survey as accountants are service providers in the financial space with SME’s and professional clients. When asked, 80% of the accountants felt they delivered above average service. The researchers also asked the same question of 360 clients, one from each accountant. Just 8% of them felt they got above average service. What a perception gap!

They also asked the accountants why clients leave them. The number one reason given was price. This was number 8 on the list of clients. Their number one reason was they just “didn’t treat me right”.

So what’s the lesson in this for all of us service providers? Worry about your proposition more so than your price, and work on effectively communicating your proposition to your clients so that they never forget the value that you are adding. Make your clients feel loved by you!

While we all might go through a short period of reflection when we lose a single client, it may be necessary to take a bit of a deeper look if you find that a steady stream of clients are heading out the door. So what are some of the questions you might ask yourself?


How good is your proposition?

Picking up on the Bain findings above, how good really is your proposition? Has it actually kept pace with developments in the marketplace and are you competing with the best advisers out there who may be wooing your clients away? As clients experience the benefits of structured budgeting support and the really valuable insights that future cashflow planning delivers to them, how are you competing with this? At the end of the day, are you really offering true financial planning rather than just a transactional product focused service?


How good are you at keeping your clients engaged?

Your clients receive great advice from you at the commencement of your relationship and receive the benefit of a review each year. But what value do they get from you in the other 11.5 months of the year? More and more advisers are making great strides at improving their communication with clients, enabling them to add value to clients throughout the year. However, they also target these communications at prospective clients too – and these might be your clients currently….

Are you satisfied that your ongoing engagement of your existing clients will keep these threats at bay? Do your clients see you as the important cog in their financial affairs?


What are your competitors doing differently?

There may be other areas that are influencing your clients to move to a competitor. Are your competitors more active than you at networking locally, or seen as a valued support within the business community? Have they just developed a bigger and better (and more influential) brand presence than you that is swaying clients to move? Are they very clever in the marketing of their business? While their proposition may be no better than yours, does your client as a result of their greater presence perceive them as a better proposition? It might be time for you to revisit your marketing activities and bring more structure and focus to them.


Is price a factor?

While price is not the usual reason for clients leaving you, it can be a contributory factor if you are way out of line. You need to satisfy yourself that your price is in the ballpark. If it’s higher than the norm, can you back this up by demonstrating that your proposition is better than the norm? After all, clients will only pay a premium for a premium service.


These are just some of the reasons why clients walk. If possible, talk to clients who are leaving you and try and get to the nub of why they are going. They may at first be slow to give the real reason in order not to hurt your feelings. However, if you persist with professional questions asked with grace, you might just uncover some nuggets that will help you avoid the loss of clients in the future.

Why updating your website blog is worth the effort

A frequent question I’m asked by financial brokers when they are updating their website is; “Do I really need a blog section?” They know what lies ahead of them… the pressure to regularly post new content fills them with dread!

Well first of all, it shouldn’t! It’s not as difficult as it seems, once you are organised! But that is a topic for another day – the purpose of this piece is to set out why it is actually worth the effort.


Fresh content is key for SEO

Google keep changing the rules in relation to Search Engine Optimisation (SEO) and for a very good reason. They want to ensure that their search engine stays well ahead of their competition and to achieve this, they need to ensure that the most relevant results are displayed when a user searches for something.

There is a whole load of factors that make websites relevant, and as a result these sites appear high up in the search results. These factors include (among a number of other factors) the likes of;

  • The structure of the web pages, titles, names etc.
  • Links to the site
  • The amount and recency of content on a website
  • The external references to the content – what others are saying about it.

The last two points are the relevant ones for us here. Posting fresh content to your website is key and the easiest place to do this is through your blog as there are any number of topics that you can write about. Once you write the content, then the aim is to share it with the world via social media and hopefully get people commenting on it – all of this will help your SEO efforts.


It helps your own knowledge

This might sound a bit strange but bear with me… Committing to completing a blog (say once a month even) is a challenge. You have to identify topics and then write about them. To do so, you’ll often look for ideas, inspiration or new angles and you’ll do this by researching the topic on the web. This inevitably opens you up to reading new content and gaining a deeper understanding of the topics.

This is a huge benefit of regular writing. If you are regularly researching, you start to find really useful reference points that help to keep your knowledge bang up to date in relation to your areas of expertise.


It gives you a voice

Completing your blog gives you an outlet to demonstrate your expertise to the world! It gives you an opportunity to identify a topic of potential interest to your audience, write knowledgeably about it, post it to your blog and then share it out through your various channels (email, newsletters, social media).

While the chances are that at that very point in time, your audience may have no immediate requirement for the product or area of expertise in question (even though this does happen sometimes!), what you’re trying to do is to plant a seed so that when the topic comes on their radar, you become a natural choice for advice on the matter. In any event, regularly posting and sharing content keeps you on your clients and prospects’ radars in relation to all financial advice matters. And let’s face it, that’s a challenge for all financial advisers today – how to provide ongoing value and justify ongoing remuneration. Well this is one part of doing that.


It helps you identify “hot topics”

Regular updates to your company blog help you here in two ways. First of all, also as a result of your research before writing, you’ll begin to identify emerging themes about which you can begin to lead your audience.

Secondly as you post content to your site, your website analytics give you some tremendous insights into the particular subjects of interest. You can zero in on the types of topics that are driving traffic, where this traffic is coming from and how engaged reader are by the subjects. You start to get a sense of what your audiences want to hear about from you and this of course should then find it’s way through to your client proposition.


It demonstrates that you’re up to date

As potential clients research financial adviser websites, one of the biggest turn-offs is out of date content and websites that are obviously not kept up to date. What does this say about the adviser? Are they up to date in their knowledge? Will their service reflect the lack of care taken with the website?

On the other hand, a consistently updated blog demonstrates the opposite. It shows you have an opinion, the latest knowledge and your finger on the pulse. They’re more likely to pick up the phone to you!

So make it a goal in 2014 to keep your blog updated. It will pay dividends in many ways!

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.

Segment your clients and increase your impact

From time to time, we all get newsletters or emails from companies that appear totally irrelevant to us and not related in any way to our businesses and challenges – I hope you don’t include this particular newsletter among them! These communications simply make you wonder why you are “on the list” and the end result is that they usually just annoy you.

How do your clients feel when they get general correspondence from you, where it’s not about their specific financial plans or policies? Do they find them relevant to them and their challenges or instead do they end up feeling that they are simply on a list that a communication has been sent to without any thoughts as to relevancy? Are you actually annoying them and potentially damaging your client relationship.

However it’s not just about marketing messages. The days of “one size fits all” are over in all aspects of your relationships with your clients. You need to send interesting and engaging communications that are relevant to them, and also deliver services that your customers actually want and are willing to pay for. Different clients have different needs so you need to be able to adapt your services to meet these different requirements. You also need to be able to manage your own scarce resources; primarily your time and money, by allocating them to maximum effect across your clients. This is where segmentation comes in.

So first of all, what is segmentation? One definition of it is, “a strategy that involves dividing a broad target market into subsets of consumers who have common needs, and then designing and implementing strategies to target their needs and desires. In short it is tailoring your marketing and service propositions to meet the needs of your different customer groups.

Segmentation for Financial Advisers
So you want to start segmenting your clients. The first step is to decide the factors that you are going to use. Well-developed segmentation models will use a number of these to drill down to smaller sub-groups of customers. Some factors used by financial advice firms are;

  • Revenue from customer – maybe averaging any initial commissions over a number of years before adding to renewal commission.
  • Premium levels
  • Assets under management
  • Potential for future business
  • Customer profile
  • Income levels
  • Age
  • Geography

Tailor your services

Most financial advice firms that operate segmented models use profitability and potential as the key differentiating factors. They aim to provide a better service to those clients who deliver greater value to the firm.  However I have also spoken to a number of advisers who claim that they sub-consciously do this segmentation – that their best clients get their best service. However when you dig below the surface, it usually emerges that it is the clients they know best that get the best service, not necessarily the clients who require or deserve the best service.

Some advisers argue that they operate a gold plated service for all clients, irrespective of their value to the business. Is this right? Well yes, your less valuable clients will be delighted with this as they receive a premium service for effectively low cost to them. However how do your better clients feel?  They are delivering a lot of value to you but not getting any additional value in return… So you are pleasing your less valuable clients, at the expense of your best clients!

Once you have completed your segmentation exercise, you then need to tailor your propositions specifically for each group. Multiple propositions are probably the route to go; however they should be built on an incremental basis, defined by customer value. Your least valuable clients get a basic service. Your next tier of clients get a better service – more frequent meetings, reviews, communications, access to people etc. and your best clients only get your gold plated service – all of the above with extra trimmings on top!

You may also find as a result of your segmentation that you have been very successful in attracting business from one particular segment – a specific occupation, a geographical area, businesses in a certain sector etc. Can you corner this niche? Make yourself the resident expert and go-to guy in this population?

By analysing your client base, the exercise helps you to identify those target groups that you are actually most successful with. Lots of advisers say to me that they want to work with high net worth individuals. Segmentation will help identify how successful you are currently at achieving this; do these HNW individuals make up a big share of your client base? If not, segmentation can help to get you away from wishful thinking, and while here is absolutely nothing wrong with aspiring to work with different groups, maybe you need to reinvent your service propositions to attract these people and make your aspirations a reality.
Your marketing approach
To also briefly illustrate the importance of segmentation from a marketing point of view, consider an advice firm that has a number of group pension schemes and also a lot of individual clients too. These separate groups need tailored communications – your HR Director / CFO clients don’t want to be hearing all of the time about personal finance issues. Likewise your individual customers have no great interest usually in challenges to DB schemes etc. So segmentation from a marketing viewpoint is very important too.


In summary, is segmentation worth the trouble? Well yes it is as segmentation leads to better service outcomes for clients, and makes your business more efficient and ultimately more profitable.

Are there advisers out there who approach segmentation differently? If so, I’d welcome your comments!