New financial planners in the industry need to realise they are in “the business of relationships” and not just the advice business, according to Julian Place.
Place, a private client adviser for Shadforth Financial Group, spoke at the New Planners program on the last day of the Financial Planning Association of Australia (FPA) 2010 National Conference, aimed to provide delegates with “keys to success” at this entry stage of their career.
“We are not in the investment business. Investments are a necessary part of what we do but it’s a lot more than that,” Place said.
“I’d agree that we are indeed in the advice business but I’d say we are definitely in the relationships business – because without relationships with our clients, they’re not going to be clients for very long.
“Your clients won’t pay you an ongoing advice fee to sell them investments.
“What they will pay you an ongoing advice fee for is for you to regularly review their plan and have an ongoing relationship with them – you understand what’s important to them, you discover their problems and you help them achieve their lifelong goals.”
Place said new planners need to acknowledge this as it has a positive effect on the business.
“Ideally, about 10 per cent of your business growth will come from your very happy clients that you have a close relationship with, referring their family and friends and colleagues,” he said.
“The most important thing is building relationships. With your current clients, it’s about servicing them and contacting them, providing solid, strategic and sound advice.”
Place said new planners should give clear and decisive recommendations rather than options and that they should “promise a lot and deliver more”.