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Top tips on attracting clients of the future
13 September 2010
Chris Baigent-Reed, head of client engagement of 1st - Exchange, looks at what advisers must look to do to attract the customer of tomorrow. With many IFA firms increasingly finding themselves pitted against a wave of RDR changes and rapid technological advancements, the big question advisers need to be asking themselves is how they can prepare to manage client relationships in the future. Over the next years, the IFA market will be characterised by fundamental change. In the lead-up to the RDR and beyond, advisers must be aware of the influences these developments will have on their client relationships. Existing relationships The client relationship is central to the business of an IFA, and for many, the key to maintaining and forming new relationships will always be one-to-one contact with the client. However, the way in which this process is nurtured is undergoing an evolution. Rather than view technology as putting a distance between them and their clients, advisers must embrace technological innovations and modes of communication to strengthen their relationships and add value to the service they already offer their clients. In addition to a regularly updated and interactive website, devices such as iPhones, BlackBerries and iPads are the means by which advisers can reach out to their customer base and respond quickly to requests without affecting the personal relationship. As the use of these devices becomes more commonplace, they will transform the way IFAs do business in the future. To prepare for this evolution, it is critical that the existing data IFAs have on file is accurate, up to date and secure. Furthermore, IFAs must keep open the lines of communication, with one option being a secure client communication portal, allowing advisers to interact with clients in a timely and efficient way. This technology is already being developed by 1st - Exchange, and will enable clients to access their portfolio data, submit feedback to requests, inform their advisers of changes to their circumstances, or ask questions relating to their products. From an advisers’ point-of-view, these innovations will provide them with immediate access to client requests and allow them to respond quickly, thereby enhancing their service proposition to clients. They can also use the portal to keep their clients abreast of any changes to their business, or matters they believe are relevant to individual circumstances. The client portal can also be configured with links from their existing website offering the additional benefits of tailoring a solution to their specifications. The service will be compatible with mobile devices, allowing communication in a manner which is rapidly becoming second nature to each and every one of us. After all, who doesn’t feel half-dressed without their mobile these days? New customers When it comes to engaging with a client for the first time, the challenge is to obtain as much information about that individual as possible. Advisers can already take advantage of current applications by using technology such as customer profiling at the first opportunity. For instance, a street name and postcode can provide in-depth statistics and trend information about a prospective client, creating a socio-demographic profile, which can shed light on their propensity to buy certain types of products. By using initial contact with a prospective client to glean as much information as possible, advisers can discover information about their lifestyle, attitude to risk and their credit rating, and build a profile to assist with a client’s financial planning. With the help of technology, advisers can tailor the response to the client and develop a relationship intuitively from the outset. The different tools and software that are being developed today for the financial services space extend to visual mechanisms such as video monitoring, statistical-based scenario planning and life-modelling tools. There are also tools that can be used to upgrade an adviser’s presentation format to clients and enable them to tailor it to their particular needs. Tech savvy clients Over the next two decades a vastly different demographic of clients will be coming through advisers’ offices. Keen to set their financial compass for the rest of their lives. They will be highly educated, affluent, regular users of online social networks and the web. Online tools such as Google and blogs will lay the foundation for decisions concerning the best service providers in addition to sourcing advice and products. These ‘Googlers’ and bloggers are already starting to change the way in which they engage with advisers, and this trend is set to continue. Looking to the future, it will become more commonplace for a client to come to a meeting armed with information and questions to ask their adviser based on their own research and knowledge. To avoid losing a potential client, advisers must be equally internet and technology-savvy and pre-empt the types of questions that may be thrown at them such as by knowing how to market their business online and by staying informed about developments such as mobile access. In addition, advisers need to be able to demonstrate added value over internet sources. The jury is still out as to how soon advisers will embrace these new technologies. Reluctance is centered on concerns that technology will get in the way of conversations with the client. However, this is not necessarily the case. The speed at which advisers can now respond to client demands, via a plethora of different channels means that the notion of a constant dialogue between adviser and client is now within reach. To ensure business success and thus maximise potential profitability, it is more important than ever before that advisers are up to speed on all technological advancements. Having the right client management software and ensuring that it is updated and maintained is essential, as is having a web presence to engage with existing clients and to market your business to the ‘Googler’ generation. Having a website with online booking facilities, online communication, feedback forums and interactive access to personal data, will set advisers apart from their competitors. Advisers do have some momentous challenges ahead, but if they can take into account a few basic tips, they can begin to improve their client engagement processes that will set them in good stead for the future. Maintain regular contact with clients through a range of touch points such as via a website, an online portal, Blackberry/IPhone, as well as via direct contact. Update client data regularly and provide secure channels to enable your clients to communicate with your advisers directly. Research, understand and keep up to date on technology advancements and carefully weigh up the cost of implementing them with improving your overall client offering to existing clients and winning new clients in the future Understand your client demographic, how it is likely to change and how you as an adviser firm will need to modify the way you do business to suit their changing needs Most important, get up to speed on all the latest changes and expectations so you are prepared to deal with the client demands of tomorrow. Chris Baigent-Reed head of client engagement of 1st - Exchange Published by IFAOnline