In its latest report, The Value Gap and Winning New Clients, Netwealth found that prospective clients struggle to understand the value of engaging a financial adviser, highlighting the need for better communication from advisers to their client market.
Understanding how clients perceive the value of advice can be complicated given the highly personal and rather intangible nature of it. To understand how respondents perceive the value of a financial adviser, Netwealth developed its value for money model, in conjunction with The Lab Strategy.
Using this, the research found that trust was the most important factor when considering a financial adviser, with 74 per cent stating that they need to feel confident in the integrity of the firm.
To help build trust with prospective clients, the report said advisers need to highlight their knowledge and expertise, using client testimonials and case studies and showcasing qualifications on digital spaces, and ensure they use clear and transparent communication to explain what they can do and how their fees are determined.
This was closely followed by 71 per cent stating they want to know how an adviser will support their long-term goals of growth and preservation. To achieve this, the report suggested advisers engage in proactive communication, clearly explaining what clients can expect from their adviser and their commitment to seeing the client reach their goals.
Almost two-thirds (63 per cent) of respondents reported that they need to feel as though they are understood by their adviser, highlighting the value they see in tailored financial advice above more general advice.
According to the report, advisers should engage in co-creation, getting the client involved in the planning process for their finances, and highlight how they have considered the client’s life milestones in their plan.
“The research shows that most prospects want to learn and understand their finances, not just receive advice. They seek to enhance their financial literacy by challenging themselves with new perspectives and insights,” Netwealth said.
Furthermore, the report said advisers need to be mindful of their use of language as it plays a significant role in fostering a connection for clients.
“Behavioural science indicates that through language you can enhance understanding, frame messages effectively, shape norms, motivate action, and foster an emotional connection,” the report said.
When attempting to attract prospective clients, the report noted the importance of clear messaging online as they will usually assess an adviser digitally prior to reaching out for an initial consultation.
“When you consider a prospect’s ’path-to-purchase’, typically they will start their journey via a referral, then review your website or social media feeds, and then finally meet with you (probably several times) prior to becoming a client,” the report said.
“If they don’t immediately become a client, savvy businesses then continue to market to prospects via email newsletters, podcasts, webinars, seminars and other forms of content marketing.
“Changing perceptions during these touchpoints will ultimately provide a greater chance of converting prospects into clients.”
I think there are some exceptional advisers out there that can clearly articulate their client value proposition and yes behavioral science does come into the equation
It is crucial to start looking at this from a reverse psychology perspective eg, what would the clients want to see?
99% of the time a client only sees the end result when you present them with an SOA, they don’t see the stages and work that goes into this on the advice process, to understand the real value of the advice being given
Whether this is at a one man band level or significant business you have to understand and build your own Client Value Proposition (CVP) demonstrating to your clients the value of you as an adviser and your advice process because the client often has no idea of the amount of research,strategy and work that goes into the formulation of an SOA.
At a licensee level understanding the CVP to your clients and advisers is crucial.
And questions you should brainstorm with your leadership team and advisers are:
is your business, communication processes and frameworks aligned to your clients? what differentiates you from others?
Are you adding value to your clients and advisers?
Get this right as a one man business or licensee and you have the base mechanisms to move forward to the next stage of formulating and implementing a plan of action