Financial Marketing

I have been pondering this for a few days now since attending a seminar recently on business development post RDR, and today's announcement that AIFA (association of independent financial advisers) is to drop the independent part and welcome all non-bank advisers to their ranks has brought me to the point that I decided to articulate my view here.

We have taken our eyes off the ball!

Over the last few years I think the "independent sector" within UK financial services has really forgotten about what is arguably the most important part of our business - client acquisition!

Unfortunately I think with this blog post I bring bad tidings.

I think it has been well documented that many IFAs do not intend to continue with their business post RDR. Instead for the majority the plan seems to be to build up as much trail or renewal commission within the business with the intention of building up its value with the ultimate aim of a profitable sale just before RDR hits.

With the logic of the pre-RDR world that a business is valued based upon its level of renewal or passive income and the FSAs assurances that any trail arrangements put in place before the RDR curtain falls would be regarded as historic and in some way protected.

This logic still stands up if your intention is not to retire but rather continue with the growth of the business however it falls down if you plan to retire! The FSA have indicate that in the post RDR world that every new client must agree their remuneration with their adviser and that on a transfer of Agency, trail will not be automatically transferred on to the new adviser who must instead put together a remuneration agreement with his new client.

If the above seems a little unclear let's try and talk it through with a few worked examples.

Just because the market collapsed and Wall Street’s dirty laundry got aired all over the world doesn’t mean people need financial advisors any less. In fact, they need you more than ever! But to win their business in today’s post-financial collapse environment, it requires that you spend more time building trusting relationships and truly connecting with your clients.

People today are seeking out a trustworthy, intelligent, calming voice in all of this uncertainty that will provide an individual approach, analysis, and solutions to their financial situation. And to win over today’s investors you absolutely must be prepared to spend the time necessary to build a meaningful relationship.

Now is not the time for financial advisors to back off in their marketing. But it is the cultivation of relationships that is critical. Today’s investors must feel they can completely trust their financial advisors, and you have to show them you are willing to take the time to build that trust.

If this sounds like a lot of work, it is. But the good news is, it’s highly productive work, the kind that leads to very profitable client relationships.