Speaking at a company roundtable event yesterday, Sean Henaghan, AMP Capital’s chief investment officer with the multi-asset group, emphasised the importance of adopting a goals-based approach in order to solve issues of wavering client engagement in the finance sector.
“The problem is that our industry has become so internally focused, we have actually forgotten about the customer,” he said.
“You go to these seminars and conferences and it’s all talk about portfolio optimisation and metrics and ratios and the customer gets lost. We have to become relevant to the customer again and the way to do that is to connect to the customer and actually build trust.
“A goals-based journey is about getting much closer to the member and building solutions that actually focus on the member’s need,” he said.
ifa reported last month that AMP had launched an online tool to enhance its approach to goals-based advice.
AMP Capital’s director, Australia and New Zealand, Craig Keary said that goals-based advice can lead to more constructive conversations between advisers and their clients.
“When I talk to the financial planners that are really starting to do this, the impact that they’re having on their clients and more broadly their communities is quite profound,” he said, “and I really do think that this new way of managing money and engaging with customers is certainly something that makes us feel quite proud from an AMP Capital perspective.”
Meanwhile, AMP Capital portfolio manager Darren Beesley said this advice model makes the role of the portfolio manager easier.
“With managing old traditional balance funds it can sometimes end up that the manager sets certain objectives for a client but doesn’t know much about their client’s situation, whether they’re accumulator, retiree, wealthy, poor or so on,” he said.
“The beauty of a goals-based approach is that we’re defining a whole set of goals and a client is able to say, ‘well yes, that goal suits my problem’ and then as a portfolio manager, I learn what their situation is and I know how to invest the money in relation to that situation rather than just doing something on a set of metrics that means nothing to the investor.”
Finally, according to Mr Keary, adopting goals-based advice is key to solving client-related issues within the finance industry.
“I think ultimately it’s great for the customer and that goes a long way to solving some of the issues in the industry,” he said.
“One of the things that’s really come out over the last 10 years is that customers want more engagement with the people that are managing their money and having a real customer focus and thinking about what the real issues customers are going to be looking for and solving them is critical.”
You work for a product provider Sean. It’s only a matter of time before you lose focus on the consumer again…
In other news, independent financial advisers continue to put consumer at the centre of the process as they have done for many decades now.
Wow, so if they weren’t providing goals based advice which was designed to address the client’s needs and develop a relationship based on trust, what the hell was happening previously? If this has been the norm for our industry then no wonder the level of trust in financial advisers is so low.