Matt Linnert says it is a significant question to ask a client if there is enough value in what you do for them to want to participate for another year.

Understanding your level of client engagement, which can be related to how well you know your client, will help preempt your level of commercial risk. Knowing your client from a compliance perspective is far different from knowing your client from a commercial perspective and different again for the client-centric adviser.

KNOW YOUR CLIENT’S STUFF

This level relates to knowing what surrounds the client. A fact-find typically captures this information. Included at this level are your client’s assets, liabilities, income, lifestyle costs and occupation. You also know their marital status and if they have children. You know their age and what investments they hold.

KNOW YOUR CLIENT’S STAGE

This level relates to your client’s “stage of life” and “internal needs and wants”.

Knowing your client’s stages of life means you know, for example, they would like to retire in three years’ time, they are having a second child, or they are thinking about changing jobs.

Knowing your client’s internal needs and wants means you know, for example, that they need a greater sense of security, or need more purpose and self-esteem, or want a new and challenging project to invoke learning and personal growth.

‘Knowing your client’s stages of life means you know, for example, they would like to retire in three years’ time’

Importantly, many of these internal needs are based on voids. That is, a client may need and value security, because they are currently insecure. By filling the security void we provide value, but once the void is filled, providing more security does not provide more value.

Once voids are filled, clients often revert to seeing their adviser as a manager of investments, or someone to call upon should they need to claim on an insurance policy.

While many clients will see value in this role, the question is, how much value do they see? Time will tell.

KNOW YOUR CLIENT’S SEED

The next level of knowing your client is to know their seed.

Consider you have four types of client, one being an acorn seed, one a coriander seed, one a mango seed, and one an apple seed.

By acknowledging that an apple tree will come out of an apple seed, a mango tree out of a mango seed, and so on, you can then work with the nature of this plant, or against it.

In certain environments, the mango tree will be happy and live a long and prosperous life. In other environments it may survive, but be unhappy, unproductive, disconnected and prefer to be elsewhere.

If the two mango trees were asked, “do you want to stay or go?” there is a high likelihood that the second mango tree would opt out and the former would opt in.

Further, it would take much less effort to look after the happy mango tree – the one suited to its environment. It may even tell all of its mango tree friends to come over to visit; and when they see how suited they are to these pastures, they may ask to stay, providing plentiful fruit year after year.

Every planning practice is like a garden. You decide on what environment you create and which seeds you attempt to plant in it. If you want to cater for all types of people, then you will need a diverse environment of services, packages and communication styles; but more importantly than that, know which bundle of these will suit which client and which will not.

If you want a niche business, then you will need to identify as early as possible which clients to bring on board and which to send to other pastures – an effective and respectful play for your business, the prospective client, as well as the businesses of your strategic alliances.

It’s not that hard to discover what the seed of your clients is. Human nature and diversity have been studied for more than two-and-a-half thousand years, with hundreds of questionnaires and profilers available for any adviser willing to go there.

Employers use such resources to understand their employees. Couples use them to assist the health of their relationships. Counsellors use them to guide their clients to clarity, understanding and direction.

FoFA or not, knowing your client’s stuff, their stage and their seed is not only interesting for any client-centric adviser, it also delivers commercially – it can save you a lot of time with unsuitable clients, and can bring appropriate clients much closer much sooner, leading to advocacy.

Matt Linnert is a co-founder of www.moneypersonality.com.au and www.innergi.com.au