If financial planners want to convince Australians of the value of advice, they need to emphasise the results, according to marketing and communication experts Step Change.
“The problem is advice,” says Ashton Bishop, creative strategist for Step Change.
“People don’t want advice. People don’t buy products and services – they buy benefits.”
Professional PlannerHUB hosted its inaugural live event for members on Tuesday night, giving them a chance to have their toughest marketing problems solved within nine minutes.
A crucial issue raised by the audience was how financial planners best can promote the value of advice.
“Advice is nebulous, you can’t touch advice – that’s really what we have to take on,” Bishop says.
“Who needs advice? Nobody needs advice.
“I don’t say, ‘I got really great advice’. I say, ‘I got a really great result’.
“The value around advice needs to change to a discussion of what you’re actually selling – that we have a process that delivers results.
“So is it a strategic plan that will give you A, B and C?
“When you start talking about how people can allay their fears, jump their barriers and achieve their desires, then you have something that has intrinsic value.”
Nathan Williams, managing director of Customer Return, says that planners need to break it down and ask themselves the most basic questions.
“What is the advice? Is it full advice, is it scaled advice? What’s your story? What’s your proposition going to be?” he says.
“And then also, how do you define value?
“It’s an easy word to say but a lot of people don’t know what value is.
“And I think the most important thing is, is that value is not what you say it is, it’s what your clients say it is.
“Everyone’s got a different perception of value. So a perfect example, my wife would rather spend the time and save the money; I’d rather spend the money and save the time – totally different concepts of value.
“My first point would be ask the question to your clients of what they see is the value of your service. What’s powerful is that if you can then market that to your clients and potential referral sources.
“You’ve got to use your clients to articulate what your value is.”
Williams also recommends changing the client discussion to “marketing the positive implications of advice”.
“Otherwise you’re just going to get into a price battle and whoever’s got the deepest pockets is going to win,” he says.
“You’ve got to change the argument about price to value.”
Graham Slip, managing director of Blue Chip Wealth, said that the evening was entertaining and educational.
“The creative ideas emanating from your esteemed panel was enlightening and encouraging for me as an enterprise owner.
“The ‘pressure cooker’ nine-minute answer concept caused all to listen closely, learn from others and keep us engrossed,” he says.
The HUB community also asked how small financial planning businesses with no or only a very small marketing budget competes with the big competitors to get new clients through their doors.
Jeff Cooper, general manager of Step Change, says that “the first thing you have to do is get really clear around your story and the value that you offer to customers”.
“Clients don’t understand how to sell your business,” he says.
“So in order for someone to refer you, you actually need to tell them what to say because it’s really hard to know what to say about a service provider.”
Williams says planners should set out one or two things that they’d like their clients to be saying about them.
“How do you want to be positioned to prospective clients? Make sure it’s a consistent story…and make sure you’re easy to refer to.”
Bishop says that “when developing a strategic plan in a marketing sense, it comes down to three things: product, process and people”.
“They’re buying you and that’s the trust thing.
“Whether we like it or not, financial services and financial planning has a stigma out there in the market.
“It comes down to trust, so the ‘people’ bit is important but they’re being told, ‘Don’t trust financial planners they’ll rip you off’. That’s the negative drum.
“So you need to get honest, you need to get transparent and products will really help you.
“You say: ‘This is our product and here’s every part of the way we do a plan. Here’s why you need it, here’s how to use it, here’s where it goes wrong, here’s world’s best practice example and here’s how we use it ourselves’.
“That’s everything someone needs to know.
“The moment financial planners get that level of transparency and can answer those questions and take their clients through exactly what you’re going to do and [that] we’re going to do it together…it means we’re selling a product and a process within a context for our people.”
Bishop says: “The reality is that one plus one doesn’t equal two, it equals 11.”
“That’s because financial planning doesn’t live in your business, it lives in people’s brains,” he says.
If financial planners asked their clients what level of risk they are prepared to accept – I can guarantee the answer would shock them. Most of my clients do not want losses to exceed 10% of FUM and our strategies go a long way to meet this need.
We put 50% of our clients funds in term deposits so we can ensure their losses are limited to the risk exposure they seek.
Our role as financial planners is to meet our clients needs and that includes risk management, investment returns and ongoing strategy to take advantage of all opportunities including TTR, Co-contributions, spouse contributions, pension refresh and salary sacrifice.
We have a ratio of one adviser to no more than a 100 clients to ensure that we can provide “value of advice” to all our clients.
Our primary focus is to ensure we are delivering what out clients want and that only comes from relationship which we are good at. That is why opt-in is not an issue to us.
Disappointing that another ‘marketing guru’ thinks that they know what advice is. It is not about a product or performance – it IS actually about advice. That the advice is nebulous is not the problem, it is that the advice is too often simply an excuse to ‘sell’ a product. Advising about the implications of beneficiary nominations and estate planning, or whether to by an investment property this year or next does not produce a measurable result – except for the fact that the client feels well advised. This is what they pay for. A very good doctoral thesis by David Yeske from Golden Gate University outlines the real value of advice and how it may be ‘measured’.
Thanks Paul. What’s the name of the paper that you have referred to?