Digital technology is already shaping consumer preference around how they manage their finances. Amongst Gen Y in particular, it has started cultivating a culture of independence and a mindset of “I can do it myself”.
The good news for financial planners is that there is still space to generate customer advocacy through leveraging digital technology or by adding value in ways where automated services fall short.
Customer advocacy is critical to the sustainability of any financial planning practice, and digital enables this too. It’s never been easier for customers to share their personal experiences with strangers on peer review sites, or with friends and family on social media.
So, what can you do to generate customer loyalty, and encourage them to advocate for you, in an increasingly digital ‘DIY’ environment?
Utility of tools
Some financial planners have already started to adjust their value proposition by investing in online tools. To date we’ve mostly seen investment in providing greater accessibility via mobile, or increased access to information online, but this is only just the start.
What I think we’ll be seeing more of in the financial advice space in future is a focus on utility – developing tools which deliver control, choice and flexibility – something that is emotive (“visualising my future”), educational (“how does this work, and how can I make it work better”), and delivers something customers can engage with.
This goes beyond simple calculators, which help you work out things such as how much you are on track to retire on, to fully customised and personalised tools for more complex investments.
Think along the lines of customers answering a few quick questions online to determine their risk profile and being immediately offered a selection of funds which meet their requirements.
A long term relationship
With online tools and calculators, young people are better placed now than their parents were to do some of the financial planning themselves. Where I believe financial planners can add value instead is in cultivating a mentor/mentee relationship whereby customers can receive guidance on their decision making.
There is huge opportunity here for financial planners to focus on building relationships with their customers early on in the financial advice life cycle and guiding them through the process for decades to come.
Adopt a holistic and long term viewpoint: Gen Y often think about financial planning when it’s time to buy a property, but take the opportunity to introduce, and assist with, other aspects of wealth building at the same time: investments, superannuation and so forth.
Encourage an ongoing health check every year, whereby customers can take confidence in their financial wellbeing and benefit from your professional advice periodically.
The financial planning customer proposition needs to evolve with the growth of digital, but for planning professionals who get it right the resulting customer advocacy will propel you along the path to business success.
