Continuing on from our recent webinar (slides available here: <5 things you and your clients probably don’t know about each other (and probably should)>), this is the first in our follow-up series in which we drill down to specific actions that practices can make – with the intention to inform and uncover hidden profits in financial advisory practices.
Part 1 – Clients don’t know everything you do for them… so let them know!
For the vast majority of advice clients*, Australia’s financial systems are complex and ever-changing (think taxation, social security, superannuation and income policies etc).
*16% of Australians reported using an adviser. Finder’s 2022 Financial Advisor Report.
Think of the varied and numerous things that happen in your practice every day, just to implement and deliver your client’s financial plans. Do you think the client truly understands and appreciates the time, resources and capital invested by your business to manage their plans on their behalf?
From time to time a client may question the relationship with their adviser, possibly triggered by poor press/media (latest financial crisis or corporate failure), a conversation with a friend who has ‘the best’ experience with another adviser, or perhaps the plan’s investment performance hasn’t been up to client expectations?
Whatever the trigger, it’s our experience that at some point clients will move from accepting to questioning their adviser. Our message therefore is – don’t assume everything is great, continually reinforce what you’re doing and the value you’re delivering at every opportunity. For your existing clients, your fee is generally for ongoing service and support after all.
On average, clients today are paying $3,852* per annum to their adviser. Have you delivered this much value to them year on year? And, have you told them?
*The average fee (of all Australian practices, as derived from our database) being charged to advice clients today; to be certain, this is simply the average being applied across the total client-base of the firm – there will be clients within the firm being charged significantly more, while there will also be clients paying less.
It’s for this reason that we continue to promote the review or progress to plan meeting as key. It can be the adviser’s ‘moment of truth’ and it offers a perfect opportunity to present what you’ve done, assess how your clients feel about it and determine consequential strategies and actions. The Review Meeting is perhaps the one time throughout the year that the adviser can control the content and flow of the meeting.
And yet, Reviews have consistently ranked as the lowest out of nine key service delivery areas we survey through our CATScan client survey service.
10 Steps to maximising the opportunities and the success of your Review Meetings, ensuring it is worth your time, effort and the fee your client is paying;
- Confirm the meeting two days prior.
- Send out a pre-meeting questionnaire, ask clients what they want to talk about during the meeting, questions they might have etc. Send an agenda to make sure the client knows what areas are to be covered and the latest performance reports as well. This will save time during the meeting and help prepare the clients.
- Ensure both spouses attend wherever possible and involve both in the discussion without deferring to one over the other – treat both partners equally.
- Provide a summary of your activity since the last meeting. This will likely include activities which the client has not been aware of.
- Involve others from your practice in the meeting, to get ahead of or address any dependency concerns the client may have.
- Spend more time listening than talking – the ‘coffee test’ is a great indicator (if you finish your coffee before the client, you’ve been drinking not talking!)
- Lock in a date for the next meeting, it’s easier for clients to keep the next meeting if the date has been locked in.
- Close the loop by providing a written summary of agreed actions and next steps.
- Seek feedback, 3-5 days after the meeting.
- Cost your Review service (at least annually); compare it to your ‘revenue per client’ metric. How much does it cost you to run the Review service? Are you making a profit?
From our databank:
| Annual revenue
(practice) |
Revenue per client (average) |
| Less than $1m | $3,550 |
| Between $1m – $3m | $3,986 |
| More than $3m | $6,220 |
For your consideration.