October 3, 2017
Buyer of Last Resort (BoLR) arrangements are the worst possible outcome for clients and a poor reflection on a financial adviser, according to the chair of the Mentor Education Group, Dr Jim Taggart OAM.
Taggart said the financial advice process was built around a long-term commitment to clients that culminated with them reaching their specific goal but BoLR arrangements ended in the sale and distribution of clients as ‘books of business’.
He added that Mentor had been emphasising to its students that client service was not a ‘set and forget’ activity and that an exit strategy and transition process via a business sale should be a key component of advice service and client commitment.
“There are so many dynamic moving parts in fulfilling the expectations of clients of which trust and service go hand-in-hand – and they in turn determine the financial success or failure of the planning practice”, Taggart said.
“With so much on the line for clients, planners and the client service delivery model have to perform at their best every time without fail to ensure client trust and confidence is maintained,” he added.
Adding his comments, Mentor Director Dr Mark Sinclair said the quality of an advice process should be based within an advice business and continue after the retirement of an adviser.
Sinclair added that clients will lose confidence in an advice process that does not provide a positive experience and “…service delivery needs to be the highest of priorities as is the plan and process to do so”.
According to Sinclair the effectiveness, level and quality of client service “…will easily be identified in the planning business revenue in fees charged and longevity of client retention…” with another measure being the number of new clients introduced to the practice by satisfied clients.
“All because the client is confident they are at the centre of the planning business and their financial well-being and lifestyle, protection, wealth accumulation and retirement aspirations will be serviced long after their adviser has retired and exited the industry,” he said.