Astute Wealth Advice, a consultant to financial advisers, is urging advisers to demonstrate their value to these clients in order to keep the value of their current client books.
“Disengaged clients probably represent between 10 and 30% of an adviser’s client base,” said Astute Wealth Advice director Hans Egger, who is also a qualified financial planner licensed by CBA-aligned Financial Wisdom.
“Many advisers believe that when these clients realise what they are being charged, they will fail to see value and advisers will run the real risk of losing them as clients.”
“And as most advice businesses only make 10-30% net profit, they simply can’t afford to lose them.”
Mr Egger said many advisers have been distracted by navigating around the Future of Financial Advice (FOFA) changes that they haven’t yet addressed this disengaged client base.
However, he said advisers who are “proactive” in re-engaging their clients will better retain their profitability.
“In this environment, we have to be proactive in order to remain profitable,” Mr Egger said.
“We have to demonstrate the value of our services well before sending the FDS. Leave it too long and it will simply be too late.”
Mr Egger said Astute Wealth’s client engagement platform, AstuteWheel can help explain to disengage clients, the value that an adviser provides.
“It may be that they are part of a book of clients you bought but never met,” Mr Egger said.
“They might have moved interstate or overseas and found it difficult to visit your office, or they might simply not understand all you can do for them.”
“The AstuteWheel helps overcome these challenges because clients can interact with it in their own time and place.”
Thanks Gerry. I couldn’t have said it better.
If you struggle to demonstrate value, then you probably aren’t providing any. Only the client knows if they are getting value or not….they talk with their feet. Let’s call it the AstuteClient. I’ve been using it effectively for years.
The challenge we as Financial Advisers face is demonstrating to clients the value we provide to them, the Astute Wheel has enabled us to do this at at strategic level. As a by product we have clearly noticed the increase client engagement this demonstration of value has created for both new and existing clients
Hi all, I’ve been a Financial Planner for the last 15 years (and still am). Also over the last 18 months I’ve presented the AstuteWheel to many hundreds of Financial Planners of which 270 have subscribed.
During this time I’ve actively sought feedback about Client Engagement and how the FoFA legislation will affect businesses.
One of the misconceptions is that a disengaged client is also a low fee paying client, there will be plenty of clients paying over $1,000 a year that will not react well to a Fee Disclosure Statement if they have not been reviewed for several years.
Another consultant… Hope he didn’t charge much for this insight…wow. Also great numbers, generalisations and odd conclusion on profit and client numbers. Not sure that the un-engaged bottom 10-30% represents the same percentage of profitability.
I’d be happy to re-engage with them, but I am currently too busy preparing FDSs and adding more disclosures and disclaimers to my SOAs.
Please come up with another idea.