Could Advisers Be DRIVING Clients To Online Providers?
Best Practice Advice & Sales & Marketing for Professional Services & Strategic Issues

Could Advisers Be DRIVING Clients To Online Providers?

August 25, 2014

by Tony Vidler

Do advisers realise how much revenue is waiting for them inside their existing business?

That was the question going through my mind as I listened to a fascinating presentation at a conference last week.  A business which provides outsourced client servicing solutions provided data on its experience with working with financial planning practice clientele.

Looking beyond that I began to wonder if perhaps advisers might actually be driving some clients to choose online or institutional providers.

Consider some of these findings:

  • One third of clients (36%) have had an “advice trigger” since they last had a review with their adviser.  That is, there has been a significant change that warranted further advice, but they haven’t spoken to their adviser.
  • Most common advice triggers in decreasing priority were changes in beneficiaries on financial products; change in insurance needs; desire to start a retirement or financial plan; change of dependents status; and; change of income.
  • 77.1% of the clients contacted wanted ongoing reviews….
  • Over 31% had an increase in income since the last review.
  • Over 50% wanted to review their insurance cover.
  • Over 30% had either significantly increased or decreased debt levels

A sobering statistic was nearly a third of clients (29%) are unreachable….the adviser doesn’t have current contact details and the client is no longer receiving up to date information from their product provider.

There seems little doubt on the basis of these statistics that a high proportion of clients actually want to engage with their adviser, and equally little doubt that too many advisers have been poor at keeping in touch with clients.  Not surprisingly, many clients have disengaged….

How much are each of them worth to the advice business in any given year, let alone the lifetime value of the client engagement?

If the average client engagement is about 6 years, and perhaps a third of your client base are disengaging due to lack of contact do the maths.  If a further third of the client base have had a need to do a full review in the previous 12 months but haven’t been seen, how much revenue is either unrealised, or driven to the convenience providers?

A third of your business being disengaged and looking for alternative advice or product solutions is a HUGE proportion.

A third of your clients, and my clients, and every other advisers clients actively looking for their solutions elsewhere….and we wonder why institutional or convenience providers are picking up business faster than we are?  Maybe they are only picking up business at the same rate advisers are losing it.

If there has ever been a  time where there is a clear ROI for having a strong client engagement strategy and keeping the communication wide open with customers, then this is it.

Because it just may be that advisers ad hoc and infrequent client engagement is driving clients to the online providers.

And advisers could prevent much of that by responding to the client voice saying…..

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