With clients likely to be increasingly cost-conscious in the wake of the COVID-19 economic crisis, advisers should reposition their offering to focus more on trust and reassurance than dollars and cents, according to an industry body.
Addressing a webinar on Monday, Profession of Independent Financial Advisers president Daniel Brammall said while many advisers would be unable to compete in a ‘race to the bottom’ on asset management fees, clients were likely to place a higher value on the level of comfort and security they got from their adviser.
“If you are managing $150,000 and you are charging $4,000 [for asset management], that’s expensive, but on the other hand if you are doing lots of things for the $4,000, is it as relevant for the $150,000?” Mr Brammall said.
“Having a one dimensional approach in times like this to your value offering is a danger. Where you would want to be at if you’re trying to add extreme value is not commoditising yourself with everyone else who can manage assets, because that will be a race to the bottom in terms of price.”
Mr Brammall pointed to aspects such as providing clarity and understanding to clients, and helping them to have a clear plan in place in the current crisis as being key to offering clear value to clients that would encourage them to focus less on price.
“A better proposition is saying ‘If you write this goal down here and work with me I will give you the highest sense of certainty that that goal is not in danger – we are going to work together until you get it’,” he said.
“It’s a more comprehensive service offering and you can then disconnect from the $150,000, because context of this person’s income and earning capacity over the next 10 or 20 years, and the list of things that needs to be done, that is no longer relevant to the $150,000.”
Mr Brammall added that advisers played an important role in helping clients to focus on the bigger picture when they were being bombarded with anxiety-inducing messages from acquaintances and the media around the coronavirus pandemic.
“An adviser's real value is bringing the client's attention back to what is within your control, what can you do to help your situation,” he said.
“It reframes how the client is looking at this and calls upon them to look at what is happening now. This situation is not sustainable so it can’t be like this forever, so what do you think things will be looking like when this is over?
“Let’s bring our attention back to things we want to achieve on the other side of this coronavirus mania.”
The listed wealth management group reported strong improvements in its advice an...
Liberal senator Andrew Bragg has warned the ABC’s content agreement with an in...
The body of missing Sydney businesswoman Melissa Caddick has been found at a bea...