The future of advice models

Last night I read an interesting post on Linked in by Sean Graham (executive director at Millennium3) regarding future advice models and the way in which clients and advisers will interact.

Sean’s role at Millennium3 includes heading up the compliance team, and I must say it’s great to hear someone from compliance not only acknowledging the role of technology but actually promoting it.  I hope that the heads of compliance at other dealer groups can start to take a similar view in the near future.

Is Max Headroom the very modern model of the future financial adviser?

Most financial planners are wedded to the traditional, face-to-face storefront publisher model of financial advice but while this may have worked in the past, technological changes and consumer preferences suggest that wired/virtual/on line relationship (the Max Headroom model) might be the best model for the future.

Neuropsychological and consumer research shows peoples’ reducing need for complexity, strong preferences for on-line relationships and swift response and a distrust of “holistic” solutions? If this is the future what are we doing to prepare? (or are Ys, Zs and their successors of no interest to us?).

In my view, the future is wired client relationships, wiki advice models and lego-inspired strategies but I’m interested in understanding your view of the future and what are you doing (or what have you done) in your business to address the future of advice?

And here was my contribution to the discussion:

For risk insurance, online is clearly the way forward.  For many people, getting insurance cover online is not only a convenient option, but also a preferred option.  There are so many benefits such as the choice to deal with who you want when you want, no pushy salespeople trying to get you to sign up, and the feeling of empowerment that one gets by looking after their needs themselves.

On top of that, there will always be a perception (rightly or wrongly) that you can save money by getting your insurance online rather than dealing face-to-face with an adviser.

When I started as an adviser I was told that getting leads was going to be the most challenging aspect of going it alone.  I was also told that websites “don’t work for advisers”.  Well, my website brings me so many qualified leads that I’ve been selling the surplus leads to other advisers, so if anyone still thinks that online doesn’t work, they’re wrong.

Another benefit of building an online customer base is location diversity.  I am located in Brisbane, however the majority of my clients are located outside of Brisbane, and around half of them are located interstate.  This helps to give you exposure to booming areas outside of your own, and also provides protection if your own geographic area is experiencing a decline in activity.

When it comes to the investment side of things, particularly full financial planning, I think there will always be people who want to sit face to face with their adviser.  Increasingly though, there will be people who are happy to speak with an adviser remotely, and those who wish to bypass the adviser completely and handle their own affairs using online services.

Ultimately, the right model probably comes down to your target client and how they want (or don’t want) to deal with you.

If you’re not moving your business online and embracing technology, you will eventually be left behind.

Defining Your Perfect Client

Defining your perfect client should be easy.  He or she would will have lots of money to invest and a burning desire to insure themselves against every risk possible!

Unfortunately these types of clients are few and far between.

Rather than defining your perfect client, we should really focus on your ideal client.  Your ideal client should be someone who meets the following criteria:

Accessible

Unless you have great contacts, there is no point nominating movie stars as your ideal client.  You should look for clients who know are accessible to you.

Connection

Some of the best clients are those that you can really connect with.  This may be through joint interests, similar age group, social and/or financial standing, ethnic background or perhaps experience in the same industry.  A good example of this is the ex-carpenter who now deals exclusively with trades clients.

Interest and or Experience

This one is a little similar to the connection point listed above.  If you have an interest or experience in a certain niche, this will give you a great advantage over others advisers who don’t share the same passion for the niche.

Comfort

There is no point trying to attract company directors and CEOs as clients if you don’t feel comfortable with them.  Your ideal client should be someone that you feel totally comfortable dealing with, as there is a good chance that they will also feel comfortable with you.

Above all, your ideal client should just ‘feel right’.

If you would like assistance with determining your ideal client please contact me for an obligation free chat.