With the future of risk commissions hinging on the outcome of the 2022 Quality of Advice Review – and potentially on which Government will be presiding over implementing its recommendations – this article from Chris Unwin, originally published a few years ago, is a timely reminder of the critical importance associated with delivering a quality advice experience for the client.
Chris’s message in highlighting the importance of delivering quality and value – and being seen to do so – is that this can open doors to new advice business model possibilities that don’t necessarily rely solely on commissions to be sustainable…
As we begin to move ever closer to a fee based remuneration model and away from a commission based remuneration model, it becomes more and more important that we are creating a quality experience for our clients rather than just completing transactions and ticking compliance boxes, thereby creating a perception of value on their part.
There are three crucial aspects of value:
- Creating Value
- Communicating Value
- Differentiating Your Value
Creating Value
There are many steps we can take in the initial advice process that add real value for our clients:
- Positioning personal protection within the context of your client’s overall financial plan
- Prepositioning a “wants analysis” as opposed to a needs analysis
- Introducing up front the key concepts of long-term business relationships and regularity and continuity of service
- Asking questions that facilitate our clients verbalising what financial outcomes they would want in specific ‘what if’ situations
- Pre-application underwriting N.B. Managing clients’ expectations and painting the worst-case scenario
- Presenting recommendations in a client friendly format
- Educating your clients on the underwriting process and committing to facilitating and accelerating the process where possible
- Being proactive not reactive during the underwriting process and keeping in regular contact with your client
- Have a face to face meeting with every new client once policy documents are issued
Communicating Your Value
- Most of the problems are in your head, not the client’s. You are already giving value – therefore any changes needed will be in your mindset rather than your process
- “Value” is perceived not specified. It is an awareness on the part of the client that comes with enjoying a quality experience rather than experiencing a transaction
- Paying for quality advice will be an expectation of quality clients – therefore make it a question of which fee structure rather than whether a fee as early in the process as possible
Differentiating Your Value
- Avoid using terminology that creates a negative perception – there are many words and phrases commonly used by advisers that create a negative perception and thereby enable potential clients to put up the shutters and say ”No”
- Intergenerational Advice – we need to educate pre and post retirees that the biggest financial threat to their retirement nest egg is if one of their kids or grandkids were to suffer a major illness or injury without proper protection being in place
- Level Premiums N.B. Trauma Cover – the key to your clients reaping the maximum potential benefit from their Trauma Cover is to ensure that they can continue the cover for the maximum possible period
- Child Trauma Cover – should be sold not as an optional extra but as an automatic inclusion
- “P Plater” Protection – a Trauma policy covers the five most common injuries sustained in car accidents. Therefore, how many parents of P Plate drivers would not want to convert their kids’ Child Trauma sum assured into Adult Trauma Cover if they knew this?
- Overcoming the Price Barrier – the Percentage Concept. Don’t focus on the dollars and cents that your client’s personal protection package is costing; focus on the percentage it represents of the income they are securing – it will always sound like less
Chris Unwin is conducting his first face-to-face adviser workshops in two years, entitled How to Gain Trust and Build Stronger Client Relationships. Advisers can click their preferred state location below for the workshops, which he will be running on the eastern seaboard at the end of May 2022:
