It takes a brave financial planning business to ask its client whether they’re thinking about severing the relationship. If a client has been thinking of doing that, then merely asking the question can be the catalyst to making it happen.
But it’s a particularly stupid business that doesn’t ask the question. Often the first sign that a relationship is broken is when a client fails to return for a review. A constructive conversation before the client decides can often be all it takes to save and rejuvenate the relationship.
Every financial planning practice in the Godfrey Pembroke network is currently asking its clients exactly that question.
As part of a comprehensive client advocacy program, the licensee wants its advisers to know now if clients are so unhappy or disengaged that they’re considering leaving, and to find out before they actually leave.
Sean Allen, general manager of Godfrey Pembroke, says work being carried out in conjunction with CoreData will paint a clear picture of how clients view the services and the quality of advice they receive, and will reveal – crucially – how they regard the overall advice experience.
In return, Allen says, Godfrey Pembroke advisers will get a clearer understanding of how the demands of clients are changing.
CoreData will “work with the practices and say, your client advocacy is here; we would like to work with you to take it from X to Y”, Allen says.
Established benchmark
Measuring the net promoter score (NPS) of practices will reveal how they measure up to an established and recognised benchmark.
“I have purposely put that type of question in there, so we can compare businesses not just locally but internationally,” Allen says.
Allen says the advocacy research is the latest piece in a series of projects that have encouraged Godfrey Pembroke practices to really think hard about how they define and articulate a customer value proposition (CVP), and how they identify and focus on a clear target market.
“The customer advocacy work is at the back-end of all that,” he says.
“They have been doing that work for a couple of years now – is it resonating? This is a test of the work that’s been done.
“We see this not as a one-off but as a regular project that we’ll be doing every six to 12 months with the client base of each business.”
Allen says the research has already produced some surprising results – including positive feedback from clients that they are even being asked these questions.
“I don’t know if it’s got anything to do with the current environment and what’s been going on in part of the industry, but we got comments back saying we’re pleased you are doing this – and that the survey is easy to do,” he says.
Three groups
Allen says that while clients have traditionally been crudely divided into three groups – delegators, validators and self-directed – those distinctions are blurring, and clients are moving along the spectrum: delegators are moving into the validators’ territory; and validators are becoming increasingly self-directed.
A driving force behind the shift is more readily accessible information and the fact that clients are typically doing their own research and fact-finding before dealing with a financial planner.
“You’ve got this significant digitalisation changing consumer behaviour as they shift through the spectrum; and a shift in financial services not being a linear relationship any more to being more [episodic]; and we’re seeing now more than ever how critical it is to have engaged clients,” Allen says
“It doesn’t mean they don’t engage quality advisers, but you need to engage these clients differently.”
Allen says that about eight out of 10 purchases now are validated online before they are made. Clients are doing their homework on financial planners before they look for one to engage.
“If you don’t have a digital footprint, and a footprint that has information about you – a credible footprint – and if it lacks insights from people who have used [your services], then you are getting behind the wave,” Allen says.
Tough questions
Allen says professional practices can’t afford to be shy about asking the tough questions.
“There’s a couple of challenging questions in there, which most businesses probably wouldn’t ask,” he says.
When the licensee raised with its practices the idea of asking clients if they were considering leaving, Allen says the initial response was guarded.
“But as we had that conversation, the firms said no, we should put that in there,” he says.
“You want to know if a client is thinking about leaving, so you can deal with it before they go. Clients tend to walk before they talk.”
