Advisers should rethink their client value proposition, in which advice is sold to their clients, not given.
This is one of a number of key messages delivered to capacity audiences during the AFA’s GenXt Roadshow 2010.
While the messages in the roadshows are being delivered mostly to the new generation of advisers, presenters have been encouraging all advisers to consider and potentially ‘renew’ the nature of their relationship with their clients.
For example, Graham Peatey, founder of the Encore Group, asked advisers to consider the price that should reflect the value of the advice they provide, rather than simply being told by the product manufacturers how much they will be paid in selling their products:
“Product is just a commodity,” said Mr Peatey. “We sell advice, we don’t give it.”
The future for advisers lies in providing advice, not selling products
This theme was echoed by AFA CEO, Richard Klipin. Talking to advisers about ‘Life after Ripoll’, Mr Klipin said “The future for advisers lies in providing advice, not selling products.” He added this was particularly the case in 2010, given that advancements in technology provide consumers with ever-increasing direct access to products and their PDS’s.
Mr Klipin suggests the true value of the advice provided to clients lies in:
- The ability for the adviser to help their clients to understand their financial and lifestyle choices
- Helping clients make decisions that best reflect their financial and lifestyle aspirations
- Educating and motivating clients to involve themselves in this aspect of their lives
Addressing another key element in the future advice proposition, AFA President, Jim Taggart and Mark Sinclair, MD of Mentor Education and RG146 Training Australia, talked to advisers about the initial and ongoing training and education options they may want to consider in the future, and also addressed some of the moral questions that will inevitably confront advisers as they deal with different client circumstances.
Errol Woodbury, Director of Woodbury Financial Services, shared his journey, which he says has yet to be completed, towards a fee for service proposition.
Continuing one the key recurring themes of the roadshow, Mr Woodbury talked to his fellow advisers about how he has built a business that is paid to give advice.
… advisers can best build trust by listening to their client’s story, not by telling their own
Mr Woodbury also emphasised the imperative of client trust, telling the audience that advisers can best build trust by listening to their client’s story, not by telling their own.
The 2010 AFA GenXt roadshow is being presented at a time when the financial advice industry is on the cusp of change. The eleven recommendations from the Ripoll Inquiry have been tabled, but it is not certain which of these recommendations will be adopted by the Federal Government. The industry also awaits recommendations from the Cooper Review on Superannuation and the Henry Tax Review.
Outcomes from these inquiries will change the face of financial advice in Australia, and this year’s GenXt presentations have considered what may be the future structure of advice and the potential changes to the relationship that exists between adviser and client.
