Be aware of the power you hold with clients
Asking someone who to name a person they consider to be an influential person is not easy, but when the question is narrowed and the aim is to pick the most influential person, the task becomes a little harder.
The reason for this is that in deciding who is influential, one must consider are people merely well known or do they have influence and to some extent, power.
In this issue,Money Managementsought to find the most influential people in financial services over the last decade and a half, as well as of today.
However, as financial planners, if you were to place that list in front of most of your clients, their reactions would probably be one of apathy, mainly because, while these people may have an impact on your business, they do not impact upon your client’s financial needs.
What this means is that for those members of the public that seek financial advice, the person or group providing that advice becomes the most influential person in financial services for them.
If this sounds far fetched, bear in mind the amount of clients who contacted you after the September 11 terrorist attacks in the US. If you had preached a message of rational, well thought out behaviour in regards to sudden market events, it was likely your clients reacted in a similar manner. On the other hand, if your advice was to respond with sudden knee jerk reactions, it was also likely your clients did the same.
The implications of this influence upon the financial future of your clients is staggering and the legal action taken by disgruntled clients, and even some of the recent banning actions by the Australian Securities and Investments Commission, becomes clearer.
These steps are not solely taken to get back the pound of flesh which they feel was unjustly taken but rather to seek redress for the breach of trust which these advisers had with their clients.
Hopefully, most planners and advisers reading this will nod in agreement, happy in the knowledge that their business seeks to adhere to such ideals and usually does so.
But at the same time, it is worth remembering that this is not a situation to be treated lightly or flippantly, regardless of how well you think your business is treating clients.
The reason for this goes to the heart of an ongoing debate in financial services, which is — who owns the client? If someone else is exerting more influence over your client, the issue of ownership is open to debate.
The upshot of all this is that planners can, and do, hold the attention of their clients because of what they can bring to a relationship, but at the end of it all, how strong is the relationship? What are you telling them that is driving their financial goals to their chosen ends? If your clients are unclear on this point, it may be time to examine if what you are saying has any influence, and if not, change the tune or seek new clients who will respond. Anything else would be just a waste of time for all parties involved.
AUTHOR
Jason Spits
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