Independent financial advisors today face many more challenges than their predecessors. Since the Retail Distribution Review (RDR) banned commissions, and advisors have had to charge explicit fees for services, it has been an uphill struggle to convince clients of their value. The economic crisis and a loss of trust in banking and financial services generally have added to the difficulty of charging for services that were formerly seen as being ‘free’, especially where consumers are better informed and can understand many of the simplified products via the internet.
Given these challenges, how does the Independent Financial Advisor demonstrate value to a client and how is this communicated?
Gaining a loyal client base
Customer Loyalty is the strategic competitive advantage of any business and any IFA, whether you’re looking for finance jobs abroad or in the UK. Given the higher value of an existing customer, every advisor should make this their primary objective. This is achieved by developing a trusting relationship based on the clients’ needs. Trust – perhaps the most important factor in all relationships – results from consistency and reliability, openness and honesty, and good communication. It is achieved by patient relationship building that focuses on the client.
Coach your clients carefully
Providing financial advice can be a little like mentoring and coaching in its early stages. Those looking for IFA jobs abroad that want to cultivate success need to listen carefully to clients’ needs and to help them to define clear goals where previous thinking may have been vague. It is about patient explanation of the basic principles of investment, and understanding clients’ responses to issues such as risk and return.
Keep your knowledge bank full
Fundamentally, clients want to maximise the values of investments as tax-efficiently as possible. There are many products they can use to achieve these objectives and an advisor can invariably add value through an in-depth knowledge of the investment landscape and its application to clients’ specific needs. Any international financial advisor worth their salt should avoid simply comparing different offers as a sales technique – many clients will have already used the internet to do this and there is little perceived value in it.
Perhaps the biggest difficulty advisors have is that they’re unable to promise investment outcomes, and attempts to do this invariably destroy credibility. However, excellence in service delivery is something that can be promised – and delivered – and is another way in which value can be communicated. Regular contact with clients, for example to discuss a quarterly review in the context of their life goals, has added value. Volunteering new information regularly and advising action closes any gaps between expectation and delivery and helps to forge stronger long-term relationships.