How to build deeper client relationships in the technology age
With the surge of online technologies reducing face-to-face time at a rapid pace, planners must make sure the push towards efficiency doesn’t come at the cost of client relationships, writes Duncan McPherson.
Financial planning is an integral service to support Australians to grow and secure their wealth. This is even more evident with the growing concern that many Australians will not have enough money to retire on.
Almost one third of Australians expect a large shortfall at retirement while a further 25 per cent expect a shortfall to some extent.
The last five to six years have been some of the most difficult for anyone running a financial planning practice. In that time we’ve experienced a global downturn, the rise of technology and a legislative focus like we’ve never seen before.
Whilst financial planners and practices have been focused on the immediate challenges of compliance and recovery from the global financial crisis (GFC), customers have become more empowered than ever.
In the past six years a lot has changed for consumers; they have become more discerning and have taken greater control of their own destiny.
This has been driven by the scars of the GFC, but also the rapidly changing technology landscape which has enabled customers to have access to the information and tools to make their own decisions.
If we look at technology, cast your mind back to early 2008, prior to the GFC. Apple was releasing its new generation iPhone (we’re now onto the 5s) and the iPad was still two years away from being released.
The statistics on smart phone and tablet adoption far surpass that of the computer, meaning customers now have a world of information in the palm of their hands.
For the financial planning industry we’ve gone from a position of telling customers what they need to a model where customers are in the driving seat choosing how and when they wish to engage.
With the advent of new technologies consumers have changed their expectations of what they want from all service industries.
As we head into the end of financial year business planning season in July, financial planning practices need to start focusing on what they can control to remain relevant to their existing clients and attract the next generation of clients seeking advice.
For this year’s business planning, practices should really focus on the customer more than ever.
Customer behaviour and expectations are changing rapidly and what clients value and are willing to pay for has changed.
This doesn’t necessarily mean you need to start communicating through Facebook or Twitter but it does mean you need to understand your client intimately and look to communicate on their terms.
To do this you may require your practice to identify a client group that fits your profile and culture and develop a service offering that’s attractive to them.
In the lead-up to business planning season, there are three key areas to focus on:
1. Understand what your client thinks about you, your service proposition and how you meet their future challenges.
Business Health has been tracking client feedback through their “CatScan” for a number of years. Their research says that only 15 per cent of practices have a structured approach to seeking feedback. That means that 85 per cent of practices are not gathering data to help them with future decisions based on their clients’ feedback.
Practices should also seek to take a leaf out of their clients’ book and start doing their own research on consumer behaviour and trends.
Sometimes we forget that we’re consumers too. Ask yourself how have you changed your behaviours over the past five years? Now think about your business; has it changed at the same pace?
2. Prepare your own financial data and understand what trends you’re starting to see.
Analysing your financial data doesn’t need to be hard. It can start with some simple questions about profit and expense management and gradually move into more complex areas.
3. Understand the overall state of your business.
This is similar to the conversation you have with your clients around planning for unexpected absences, sickness, retirement or future financial shocks.
Like gathering financial data, this can seem a burden but as we’ve seen on a number of occasions, the unexpected can and does happen, and how your clients, staff and investments cope is dependent on the state of your business.
This is an exciting time for financial planning and practitioners, especially for those willing to understand their clients and what they value.
The number of people needing or seeking advice is not shrinking; it is simply becoming more discerning and agile. Your practice needs to do the same and this starts with having a deeper relationship with clients, understanding what they want and delivering.
Duncan McPherson is head of licensee productivity and development, Advice Partnerships, MLC.
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