The introduction of the Future of Financial Advice (FoFA) will have a potentially significant impact upon the financial planning industry. While there has been plenty of talk around the potential downsides of FoFA, there are opportunities in the legislation and I always say to our advisers: “Do what you can now – love your clients, build a fence around them and build your business from there.”
Post-FoFA, client engagement will become even more important. Engaged clients – those ones who see regularly and love you enough to give you referrals – will always be the cornerstone of a business that survives FoFA. Strong client relationships will survive opt-in, they will survive annual disclosure statements and they will survive the best interest duty. So if you build your business around strong relationships with clients who are engaged, who trust you and love you enough to refer you, you will always be okay.
Another opportunity in FoFA for advisers lies in the potential to explore and develop more innovative ways of adding value to clients. Scaled advice, for example, is essentially an extension of your relationship with your clients.
You should always stand for something with your clients, and they should know what you stand for. So scaled advice is a way of reaching out, non face-to-face, to your clients in a way that they value. Normally this would be via phone or Skype.
It could be something as simple as you ringing them up to check that their super contributions are okay, talk through some changes to their risk policy or discuss a quick portfolio rebalancing. This approach also provides you with greater business efficiencies and allows you to see more clients, but at the same time it allows you to scale the way you deal with your client base.
Client engagement and the ability to deliver good advice in a way that clients value will become increasingly important in a post-FoFA world, and now is the time to start exploring the potential of these in your practice.
