Demonstrating ongoing value as a Financial Planner
I received an interesting enquiry from a Financial Planner last week.
Despite his no doubt excellent service, some of his clients were starting to ‘push back’ against the cost of his ongoing fees.
This wasn’t an adviser charging excessive amounts. I would say his ongoing fees were broadly in line with the market.
What he was experiencing is something I believe more and more Financial Planners will face over the coming years; fee sensitivity.
It’s only natural for clients to quibble over your ongoing fees. We live in austere times, so any opportunity to cut expenses is up for grabs.
With growing media attention over the level of investment management fees, and the fee disclosure mandated by MiFID II regulations, a growing number of clients are getting attuned to what you charge them each year.
So how do you go about reducing client fee sensitivity, in respect of your ongoing adviser charges? Here are a few suggestions.
1 – Do a great job for them
This one should go without saying, but I’ll start with it for the sake of completeness.
Get face-to-face with every client on at least an annual basis. Give them a real review report that is more than just a valuation printout from your preferred wrap platform. Respond promptly to their enquiries.
This stuff isn’t rocket science, but it does form the basis of reliable customer service that will remove the vast majority of fee sensitivity from your client relations.
2 – Stay in touch
You need to be contacting each client on at least a monthly basis, with an email newsletter.
Bonus points if you send this once a fortnight. Triple bonus points for a weekly email newsletter.
Make sure you’re adding value though; tell, don’t sell. Your email newsletter should be topical, informative, and genuinely useful.
Sending a bunch of poorly written, generic market news in your email newsletter is likely to have the opposite result to your intention.
3 – Show your appreciation
You care about your clients. Make sure you show them.
A powerful tool we’ve seen used successfully by Financial Planners is hosting a client appreciation event.
Hire an exciting venue, get some lovely grub in, and arrange for a mix of speakers; cover lifestyle topics to balance any more technical or investment related content.
This approach doesn’t have to cost the earth. It’s a great way to spend time with your clients outside of the usual meeting cycle, give them something of value, and introduce them to other clients with similar interests.
4 – The personal touch
In this increasingly hectic digital age, don’t underestimate the power of a handwritten note.
Always keep switched on your attention radar, looking for relevant and interesting things relating to the interests of your clients.
Something you have on your side as a Financial Planner is your intimate knowledge of each client. When you spot an article, event or book that matches their particular passions, send it to them with a short handwritten note, so they are reminded you are thinking about them.
5 – Send them a book
Research consistently identifies reading as one of the favourite activities of high net worth and mass affluent investors.
If you come across an excellent book, send it to some clients with a handwritten note.
Even better, write and publish your own book that captures your unique worldview on financial planning and investment management. Send every new and existing client a copy.
6 – Showcase your clients
If you want to make a client feel particularly special, put them in the spotlight. With their permission, of course.
A powerful way to do this is to create your own client magazine and feature a client as the cover star in each edition.
You can interview them about their life story, get a photographer to take their picture (and give them a framed copy afterwards), and then give them a whole bunch of the magazines later, which they can proudly hand to friends and family.
7 – Throw a party
At least once a year, close your office for the afternoon, get in a picnic and some beers, and invite all of your clients to join you for a party.
This is about showing your appreciation for their ongoing support, as well as getting to know them on a more personal, social level.
You can add some special touches to this party, such as hiring a photo booth where clients get quirky photos taken at the event, with copies to take home with them. Make sure you add your logo to each one.
That’s seven suggestions for demonstrating ongoing value as a Financial Planner.
Doing one or more of these for your clients is a powerful way to reduce fee sensitivty and foster closer ongoing relationships.
Do speak to us if you need help putting any of these suggestions in place.