More than 18 months have passed since the start of the new regime. To reflect on how things are progressing, we recently ran a panel discussion as part of our webinar series ‘Bring in the Experts’. And we chose to focus on the core of the new regime: client servicing.
To capture as many different angles as possible, we invited experts from various layers of the financial advice sector. Toni Dodds (Lifetime) and Tim Fairbrother (Rival Wealth) focused on the advisers’ perspective, whereas Luke Jackson (Resimac) and Michaela Hunter (Fidelity Life) shared their views as product providers. Also, Financial Ombudsman Susan Taylor shed light on the complaint side of things.
So, what does client servicing look like now? Not an easy question to answer, but our guests did a remarkable job at bouncing ideas and taking in each other’s point of view. So, here’s a summary of the many interesting points they raised – you can find the full recording at financialadvice.nz.
The first thing to note is that the new regime is not prescriptive, but rather principles-based. This means that, while it provides standard duties and codes to apply, it leaves it up to the financial advice providers to find their own way.
Far from being a box-ticking compliance exercise, it encourages advisers to develop processes that are fit-for-purpose for both their business and their clients. And one thing we’re seeing is that, once these key principles trickle into good consistent processes – implemented across the business, well-documented and regularly reviewed – providing clients with a great service almost becomes a natural outcome.
Another key theme that emerged from the discussion is the importance of having a value proposition and understanding what sets you apart.
Before looking granularly at your client relationships, it’s crucial to review your business as a whole: what your service offering is, what your clients need from you, and how you plan to deliver it. The clearer you are on what you do, the easier it is for clients to understand how their financial life can benefit from your advice.
With a friendly reminder: you don’t have to be everything at once for your clients. The key thing is to define the boundaries of your domain and set clear expectations from the outset. The next step is to ensure you set a framework within your business to deliver on that promise. And whenever a client’s query falls outside of your domain, be ready to refer them to other advisers who are competent in those areas.
Setting standards and processes is essential, and over time it’s paramount to adapt them to your clients’ ever-changing needs.
This is relevant for all kinds of clients, especially when it comes to their vulnerabilities. Changes in market conditions, for example, can affect clients’ financial life significantly. So, adviser businesses need to be agile enough to:
The keyword here is ‘understanding’: the adviser needs to understand the client, and the client needs to understand the adviser and their offering. And this understanding wouldn’t exist without an open line of communication.
Showing your clients that you’re willing to listen helps build trust and loyalty. Plus, you can use the insights to create an even more personalised, client-centric experience. Not only the client relationship can benefit from it, but also your business as a whole.
While there’s an increased obligation for more consistent, regular and clear communication, some strategies may work for certain clients but not others. For example, clients in their 30s may prefer to be communicated with via email, whereas older clients might prefer a phone call. And then, there’s the question of frequency.
Having said that, it’s a good idea not to rely on assumptions or educated guesses. Why not ask your clients’ directly, instead? Some businesses like to run periodic surveys among their clients, so they can have a say on this crucial component of the relationship.
Some may be content with receiving a once-a-year review meeting reminder. Others might also be interested in boosting their financial literacy, be that through a newsletter or social media. Whatever the channel might be, if your communication strategy is meaningful and fit-for-purpose, the message will likely go through. If not, it may get lost in the inbox or simply ignored.
On this note, here are three quick takeaways from the panel, to ensure your communication is relevant:
Interestingly, according to Financial Ombudsman Susan Taylor, most complaints they receive are due to miscommunication or a lack of communication. It goes to show how fundamental it is to not only invest in the quality of your advice, but also in how the value proposition is communicated.
Last but not the least, the panel discussed the use of technology for record-keeping.
It can be challenging (not to say impossible) to remember the detail of each interaction you had with clients. And that’s why, in today’s environment, a good CRM system can be a great asset to your efforts – no matter how big or small your adviser business is.
Keeping detailed notes of what was discussed and the advice provided is not just a regulatory requirement: it makes it easier to run your business and deliver an outstanding client experience, tailored to individual needs and well-documented from the get-go. It really is a win-win.
At Financial Advice NZ, we’re here to provide financial advisers with the tools they need to provide the best possible service to their clients. Visit financialadvice.nz to learn more about our adviser support and resources.