Advisers Risk Losing Clients if FDS Doesn’t Demonstrate Value

Fee Disclosure Statements may push clients away from financial advice, if advisers fail to demonstrate value, warns one industry consultant.

Colin Williams, Founder of strategic marketing and social media firm, Humble Financial Services, says many advice firms see an FDS as something to be ticked off the compliance list. But if the adviser has failed to demonstrate his or her value, then the FDS will become a document that screams ‘more fees’ in the minds of clients.

He says advisers need to consider the FDS in the context of the client, highlighting the following factors that may influence consumer behaviour:

• Most people don’t use a financial adviser
• The fees the average person expects to pay for a financial plan are substantially less than reality
• People have greater access than ever before to research advisers
• The current market boom in ‘DIY’, driven by SMSF
• Media reports of bogus advisers, which easily outstrip media reports of advisers adding value
• Online financial services businesses delivering the message that advice is not required

“The public haven’t heard of FoFA and wouldn’t care if they did. However, they care about spending money (fees) and they will use the power of the internet to assess the value of those fees.”

Experts in their field don’t have the same pricing pressures as their competitors

Mr Williams says in order for clients (both existing and prospective) to be able to appreciate the value of the fees an adviser charges, the adviser has to position themselves as a financial expert.

“Experts in their field don’t have the same pricing pressures as their competitors. Being known as the expert adds significant value to your business and positions you to dictate the fees to be charged.”

He recommends advice practices build a communication plan which positions the adviser and their business as the financial expert for the firm’s target market.

The following is a list of essential elements Mr Williams says should be considered by advisers in their communication the plan:

• Promote the ‘financial advice’ big picture – Seeking advice from experts makes good sense
• Why you want to be part of the big picture – Why you are so passionate about helping people with great advice
• Your association backing – Who is keeping an eye on you and the rules you follow
• Alliances that you have – Offer peace of mind through association with established and trusted businesses
• Demonstrate expertise – Create featured articles, white papers, video and E Books
• Highlight results – Testimonials from clients
• Show what you really offer – Peace of mind, a better life free from financial stress
• Be authentic – You can’t hide in the digital age
• Look professional wherever you turn up – Google yourself and see where and how you look – you might be surprised and your clients will see the same results
• Create some ‘social proof’ – Be found on different websites for all the right reasons
• Communicate like you belong in 2013 and beyond – You need to look relevant and if you don’t communicate with your clients online, someone else will
• Show consistency – Map out a plan and stick to it
• Service clients in a manner that suits their needs not yours – Do you really need clients to attend your office when we have Skype?
• Offer different communication for client types – Give the detail to those who want it and just the summary to others – easy to do with new CRM systems
• Show some personality – Clients buy you and your team