As our regular readers know, we sometimes open our blog to guest contributors and this week we are delighted to welcome Chris Smallwood, Chief Executive of 2plan Wealth Management – 2plan are recent winners of the 2010 Technology Adviser Of The Year (Money Marketing Awards).
Over the past few weeks I have been travelling the Country on what ironically feels very much like the campaign trails of the political parties vying for election. Unlike Messrs Cameron, Clegg and Brown however, the big issues of the day which I have found in meeting many IFAs at our regional roadshow events hold a much more unified voice of opinion. The big question on ‘my’ electorate’s lips is very simply: ‘what does the future hold?’
Firstly, we all know the reality is that regulation will become tougher not softer. The FSA places a considerable degree of responsibility on the IFA and with this also comes a significant increase in costs.
Although not amongst our own ranks, but listening to more general feedback, the worrying news is that there remains a small minority of IFAs who are looking at all the changes in the industry as negative and spending their time looking at how they can circumvent things. For this group, their main issue is whether they can just undertake the minimum regulatory requirements; focus on trying to get as much commission now before their world changes; hide from the fact that they are meant to be qualified people in today’s marketplace – and not moan about how many years they’ve been in the business, so ‘why should they have to take any more exams?’.
The future of advisers is not about (and has not been for some time many would say) trying to find some fancy product that some provider has dreamed up and painted glitter on it so it shines brightly and attracts the eye of an adviser looking for something to sell – as opposed to focusing on building a service orientated business.
It’s not about finding some exotic funds so you can have something to go back and sell to an unsuspecting client – who not only never knew such thing existed, but more importantly, never saw it as relevant – when all they are trying to do is find an adviser who will help them achieve their goals and objectives.
We believe the future for successful adviser businesses is to distinguish which of your clients require a professional service – and are prepared to pay for it – and which would prefer to retain a transactional service and just as TCF prescribes, to give both groups what they want.
Demonstrating your commitment to the longer term client relationship with a personal client agreement not only builds mutual trust but vitally also provides a solid framework to support the adviser’s future. With this in place, the adviser can relax and be more confident of building up sustainable income streams – allowing them to focus on the service and advice as opposed to just product selling.
Having 200 personal client agreements in force with clients who you are building trusted relationships with far outweighs the old model of claiming to have thousands of clients and just seeing what else you can sell them – and then think that the business has any real value when you retire. Who would want to buy it? However, a business with a number of client agreements in force with clients who recognise there is a cost for advice and on-going service I would say is really worth something. But the transformation we are talking about is a process, not an event.
Becoming your clients’ professional financial adviser through a transparent, consistent and trusted approach will ensure they stick with you for years to come and provide a stable secure business worthy of future pride and aspiration. In this ‘election’ then and with no political bias intended, the answer is obvious: vote for change!
