The majority of clients and advisers focus on fees as the main form of transparency that matters. When in reality, there is another transparent area that should be of higher focus which will make your life much easier when dealing with clients going forward.
Transparency in relation to the advice process.
When a new client agrees to meet you for the first time, they only understand who you are from your social presence and website. They have almost no understanding of what to expect or what a financial adviser actually does.
A client will always feel negative about any fee you put in front of them as it’s a non-tangible product you are delivering so they cannot associate a physical attribute to the value. Therefore, clients are always on the back foot as they truly don’t understand how much of an impact you are about to make in their lives.
Imagine if a client understood the exact process you engage in from the first meeting through to ongoing maintenance. Imagine them saying, “what you do doesn’t warrant the advice fee you are charging”. Sounds too good to be true right?
Throughout my years in advice, I was transparent about the advice process before I disclosed my fee. This enabled me to convey the significant time and resources involved in delivering their advice. Once I presented my client the fee, they never said it was too much as I had conveyed the process involved, time and costs to generate a uniquely tailored advice. By being transparent about all aspects of the advice process, I had created the foundations of an open, honest, collaborative and mutually respectful relationship. The relationship transformed from “what can you do for me” to “what can we do together”.
So, ask yourself, do you have a process and medium to educate your clients as to what is involved in the following:
– The Fact Find Meeting and Process?
– The Research Process to deliver their advice?
– The Statement of Advice Meeting?
– The Implementation Process and what is involved?
– The Importance of Insurance or Investments?
– Education about Asset Classes or Estate Planning benefits?
Take for example, you have just had your initial phone call with your next client. Instead of hanging up the phone and proceeding with their advice, you take two minutes to send them an already written article or recorded video (your preference) explaining what to expect at their upcoming Fact Find meeting. Following a successful the Fact Find meeting, they have agreed to work with you. Follow up the Fact Find meeting by sending them an article or video explaining the next phase of the advice process – the research stage.
During your research stage, send them an educational article or video about various areas of their advice such as the different asset classes or types of insurance they are getting. Before you know it, you are ready to present their Statement of Advice. Without taking too much from your daily operations, you have provided transparency and education throughout the whole process.
Most financial advisers I have spoken with, do not have a procedure to educate and inform their clients throughout the advice process. They simply sign the client up and complete the advice, then meet the client again at the advice meeting. The client has had limited to no engagement during the entire process, often leading them to wonder if their fees are put to good use.
Don’t let this be the downfall for your client relationships. Sign up to try our Terms of Engagement today to ensure that your first impression is the one that counts.