I was recently approached by one of our adviser clients who appeared quite flustered. The subsequent discussion revolved around the fact that a retired investor who had been a client for some time had requested a meeting with him on the back of a proposal he had received from another adviser. The investor had taken it a step further and approached a third adviser for a proposal as well. The existing adviser seemed to take it with some disbelief but also very personally. I asked him two questions:
- Do you truly understand your value and are you able to articulate it?
- Does your client truly understand the value you add?
What followed was a lengthy discussion about understanding the value an adviser adds, both from the perspective of the adviser and the client.
Appropriate, professional and ongoing advice is essential in assisting clients to achieve their financial goals. Clarifying the scope of this ongoing service is critical. The value an adviser adds revolves around the development, implementation and ongoing monitoring of the financial plan i.e. the journey with the client through many of life’s transitions. There needs to be a clear link between an adviser’s service and the ongoing improvement (over the long term) in a client’s position. This will make an adviser’s value-add more visible and more tangible and demonstrate without question the value added by an adviser.
The world of the adviser is ever-changing. Regulation, technology, consumer awareness, client transitions, investment markets, etc. require advisers to be flexible and to adapt to the environment, without compromising their value propositions. It is therefore of critical importance that advisers stipulate their services in a service level agreement (SLA) that is shared with prospective and existing clients. It provides a largely objective framework that can be revisited in the situation described above. Some of the most important services that may be included in such an agreement are the following:
- Understanding all aspects of a client’s circumstances to provide comprehensive and holistic advice
- Identifying and considering any concerns and/or risks when dispensing advice
- Recommending appropriate solutions / products to support the advice
- Implementation of the advice recommendations
- Ongoing monitoring and adjustment of implemented recommendations when required
- Provision of suitable tax and estate planning advice
- Ensuring a will is perfectly aligned with the advice
- Ongoing education and training to remain skilled within the financial planning environment and aware of all industry developments
- Being independent, to provide unbiased advice
- The embracing of technology and the implementation of processes to the benefit of clients
- Acting as a trusted adviser with all the necessary diligence, care and skill
- Operating a sound business that supports the delivery of a value proposition
A simple survey of clients may also provide an indication of whether an SLA reflects those characteristics with which clients identify in their dealings with an advisory practice. Simply ask clients the following question at the next review or during the next telephone conversation:
“With which single attribute do you most associate [name of your firm]?”
Keep a record of the answers. Hopefully words such as trust, service, care, friendly, honest, confidence, courteous, etc. will appear on the list. Use the top three or top five most used terms when designing or reviewing an SLA. Clients are likely to identify more positively with your firm and its services and question your value-add less.
Thankfully for the adviser in question and his client, the client chose to remain where he was. The client indicated that through this further engagement he feels more secure by not moving. The adviser also learned a great deal, more specifically about what made the client nervous and that defining and articulating his services more clearly would have saved both parties considerable time and angst.
This article previously appeared in The Trade Press publication – FEIFA May 2019
