Most financial advisers charge their clients more for ongoing service than they do for initial advice but provide less value. Here are five things you should do to provide real value in your review process.
- Do a financial health check
We’re all used to completing a fact find but what about a feeling find – a list of thought provoking questions that expands the clients’ knowledge of how you can help and asks if they feel they need help. Has your 60 year old retiree even considered the consequences of their married son dying in a car accident without insurance? What would be the impact on their retirement if they had to provide $20,000 per year to support his wife and children? Is that a risk they would like to mitigate?
- Have their circumstances changed?
Changes in your client’s circumstances provide triggers to identify opportunities or threats to their financial plan but your client won’t necessarily know this. A well thought out list of questions to ask your clients is important, the list should be tailored for Retirees or Accumulators. If their 23 year old daughter has moved out of home and into a de-facto relationship with her boyfriend, should this be a good time to look at how their Will is structured just in case she receives an inheritance and he takes half when they break up.
- Come prepared with information
If you think you can leave this to chance with an unstructured chat in the meeting then you’re wrong, in my experience there are 40 to 50 specific questions that should be asked and unless you have a list to go through they will never all be covered. Also if you leave them until the meeting then you give yourself no time to think about the consequences and possible strategies for your client and you will miss things. The best results are achieved if you have a process to gather this information prior to a meeting and then plan your meeting around the information you receive.
- Highlight your value
The portfolio review is the basis for most annual reviews but the danger here is that your role is diminished to that of an “investment adviser” and if the client sees you in this way they will inevitably blame you for any losses in their portfolio and compare you to the no fee alternatives.
What the client really wants to know is how this year’s portfolio return will affect their long term goals and whether they are still on track to achieve them, usually this will be the sum of various strategies and this progress needs to be measured and tracked at every meeting.
- Cleary articulate your value proposition
Can you clearly articulate your Review Value Proposition, and I don’t mean a throw away motherhood statement about achieving objectives and reducing stress I mean a real explanation of the depth and breadth of your service offering and why you need to be an ongoing part of their life and worth the cost.
It’s a difficult thing to do, it took me many years to get it right and I used a combination of visuals and words and then it became the basis for all my client facing experiences so that I could quickly and easily relate the value back to them in the experiences they had with me over time.
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