ifa Client Experience Workshop 2020 Day 2: Defining the next level of client experience

An enhanced value proposition beyond traditional services is crucial to setting up a successful advice business for the next decade, an industry consultant has said.

Addressing the ifa Client Experience Workshop 2020, Kim Payne, managing director at 9rok, said it had been established that it’s no longer possible for advisers to focus solely on investment management. 

Communication that conveys approachability and flexibility to become the “go-to” during your client’s financial decision-making process will be crucial.

“People don’t know how to use financial advisers properly, so you must look at how your communication is making them understand how to use you,” Ms Payne said.

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“One of the biggest things that you do right now when it comes to communicating your value is to help people make decisions.”

Ms Payne drew on three major areas on generating an enhanced value proposition focusing on visual value, verbal value and virtual value.

“A big part of what you do is helping them make genuine decisions, from small to life-changing ones. What’s important is getting very clear on what those decisions are,” she said.       

As a result advisers need to be flexible for clients and evolve with them, expanding on their services to be able to help a customer at all points in financial decision-making. 

“The more frequently a client relies on their adviser, the higher the customer satisfaction rate,” Ms Payne said. 

“Zoom into them, go down to that depth of  level of what is going on in their lives. Many advisers have been talking about goals-based advice and planning, but this is about digging even deeper.

“All of these are to make you the go-to person, put the placeholder in the client's mind, that no matter what decisions are going on in my life, big or small, that is more than money, the financial adviser needs to be the person they come to."

Defensive investment at the time of COVID

With COVID-19 creating much disruption, changes have also been seen in defensive investment strategies to tackle a volatile market period.

Speaking at the workshop, Matt Reynolds, investment director at Capital Group, said that new key tactics and defensive strategies will be needed for advisers in the “new normal” of defensive investing.

“When we look back at prior consistencies that have proved to be defensive, such as consumer stakeholders and utilities, we have now seen significant variation in the performance of underlying industries and companies within these sectors, he said.

Mr Reynolds thinks this variability can create challenges for investors to be in the right defensive stocks at the right time.

“Another point is defensive investors have historically focused on higher dividend companies and higher-value investments, but we’ve seen headwinds here as well, he said.

“Some of the more traditionally defensive sectors such as telecoms are also proving to be challenging. In this crisis, dividends have been cut at most companies. Many investors have also sought refuge in value companies.

Mr Reynolds thinks it’s time to start looking at a new framework for defensive investing to help consumers navigate past this period with some emerging themes that can drive a new breed of defensive investing trends.

“There are two areas in which companies that have been exposed to new technologies have seen secular growth in their total investment market. Sectors and industries such as internet activity enablers, commerce champions and next-generation utilities like social media and online gaming,” he said.

“The second part of the framework is those existing business models that are managing to drive down the cyclicality of earning streams, that includes enterprise staples companies, SaaS, infrastructure as a service products, along with additional brands that are growing strongly in an online environment and are serving to reduce the direct high level of cyclical earnings.”

Looking at the performance of the group’s funds specifically, Mr Reynolds said the New Perspective Fund, which had outpaced the market significantly in 2020, had benefited across its exposure to a set of changing trends seen during the pandemic.  

These trends included the surge in e-commerce sales, the rapid adoption of streaming entertainment and the rapid switches corporations made to SaaS, which has supported working from home growth, and away from traditional IT spend.

“Whilst they were already enjoying a tail end growth from changing business practices, clearly these COVID-driven changes in behaviour has led to a significant strengthening of this growth,” Mr Reynolds said.

Fuelling client satisfaction 

Communicating the value of advice and managing expectations around what advice is worth has long been an ongoing industry challenge.

Stewart Bell, business coach and founder of Audere Coaching & Consulting, said research continues to show clients wanting clear communication, help in making key financial decisions and to be able to have confidence that the advice they're being given is quality advice.

“It is fundamental to understand what a client experience is, and what it can do for your business and what it isn’t,” he said.

“Once you systematise a great client experience, it is repeatable and can be delivered time and time again, with technology to automate parts of it.”

Mr Bell said the first 90 days of a client-adviser relationship were crucial and touched on the three marks that can drive a high quality client experience.

The first mark is to inform so that the adviser and the client set the tone for what’s to come, according to Mr Bell. The second stage advisers want to trigger is involvement and going the extra mile for the client. 

Mr Bell said that the more invested and involved clients are, the more the relationship can be established for the long term.

“The final third area is to excite and this can take many different forms, and the key purpose is to keep clients clear on where they are going, keep the energy up on the road ahead and overseeing the journey,” he said.

Commenting on Day 2 of the ifa Client Experience Workshop, Andrew Braun, general manager marketing for platinum event partner Netwealth, said the day’s speakers had provided key action points for advisers around how to revamp their client experience.

"Like many companies, Netwealth is a firm believer of a customer-first or client-centric approach to doing business. A probably over-used phrase, yet one that sums up why customer experience is important is: ‘the last best experience a client has, is the minimum experience that client expects from you’,” Matt Heine, joint managing director said.

“When you consider for most this will be with companies like Amazon, Apple, Kogan and Afterpay, the bar for financial advice firms is very high. Netwealth, as the principal partner of this ifa Client Experience Workshop, hopes that the event provided an opportunity for you to challenge the way you think about engaging with clients and to deliver on this expectation.”

The final day of the Workshop saw Walter Raspopin of Trilogy Funds taking out the $500 daily prize.

Jason Rapley of Dare Financial Solutions was the winner of the $500 Netwealth prize.

ifa Client Experience Workshop 2020 Day 2: Defining the next level of client experience
ifa Client Experience Workshop 2020
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