Providing a clear value proposition can be the key to a successful practice - so how can planners add value and manage expectations? We speak to WES HALL of BT and TIM BROWN of Vow Financial for their thoughts on how financial planners can develop an offering that keeps clients happy for the long term.
Video transcript below:
Donna Sawyer, Wealth Professional
Donna Sawyer: Financial planners may be all set to comply with the impending FOFA regulations, but are they FOFA ready? That’s the question BT’s Head of Practice Management, Wes Hall is asking.
Wes Hall, BT
Wes Hall: I think you know there is this distinction between being FOFA compliant and FOFA ready and I think that initially you will do a really good job of being FOFA compliant and there has been quite a long track record of being compliant around coming any legislative changes, so I’m not worried about that and so and your fee disclosure statements, getting those out, that will happen. But it’s really that I think the distinction is about being FOFA ready and so being in a position where the advisors feel comfortable being able to articulate the value to customers, so the customer can continue to pay for that arrangement in an ongoing way is really important. And I’m not confident that enough financial advisors’ have gone on that journey.
Donna Sawyer: He says FOFA is an opportunity for financial planners to review their business model and to ensure their value proposition is clear.
Wes Hall: There is a really quite a steep learning curve that I think many advisors have got to go on in the next 12 months in particular so that when they do have those conversations with the client, the client actually sees the value in not only that initial interaction but also in an ongoing direction.
Tim Brown, Vow Financial
Tim Brown: The intent of the legislation never seems to be the outcome and I think that’s the disappointing thing with FOFA and we are already seeing evidence of that. And the continual change, you know from the government which doesn’t help stabilize the industry, the industry is in this constant movement because of the changes the government continues to make. I think the government just needs to make a decision ¬¬¬¬¬and move on and let the financial planners to adapt and introduce those changes.
Donna Sawyer: Tim Brown of Wow Financial says adding value is difficult for financial planners given the turmoil sweeping global markets.
Tim Brown: Until the European market settles down, I think the whole world is in that whole instability. I think what we will look to see is probably more conservative advice and I was only speaking to a financial planner the other day and he said, really it’s hard to advise clients to put anything but into cash or bonds or term deposits in this current climate.Wes Hall: We have moved into an environment where there is not an expectation of growth, it’s more an expectation of income or yield and so that’s a real challenge for financial advisors, that in the past being very reliant on put a hundred grand here and you kind of expect to get a return on that. And so advisors have had to adapt to that post GFC, and they have got to show a lot more value for the advice that they provide.
Donna Sawyer: So how can financial planners overcome this challenge? Wes Hall of BT says honesty is the best policy.
Wes Hall: They have almost got to be honest with themselves in that, where do I really sit, where do I really add value and most importantly where the customers or clients see that I add value and so there is kind of this period of introspection I think where advisors have got to really be clear about what value they add and then be true to that.
Donna Sawyer: This is Donna Sawyer reporting for Wealth Professional