Could Advisers Be DRIVING Revenue To Online Providers?
Financial Advice & Financial Planning & Practice Management & Sales & Marketing for Professional Services & Strategic Issues

Could Advisers Be DRIVING Revenue To Online Providers?

December 7, 2018

by Tony Vidler  CFP logo   CLU logo  ChFC logo

I do keep wondering if advisers realise how much revenue is waiting to be unlocked by them inside their existing business?


A little while ago I was talking with a business that provides outsourced client servicing solutions and they provided me with some of their data from working with financial planning practice clientele.


Consider some of their 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 that nearly a third of advice firms 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 or adviser.  That number is staggering.


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 historically been poor at keeping in touch with clients.  Not surprisingly, many clients are not engaged in the advice process at all.


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?


And THERE is the particular point of this article: If a t third of your business is disengaged and looking for alternative advice or product solutions then it stands to reason that they will take it when offered from the financial services provider with whom they interact weekly (if not daily); their bank.  Or, when an advice trigger occurs they will do what we all do: they will google for suggested solutions.


A third of your clients, and my clients, and every other advisers clients either actively looking for their solutions or are open to suggestion from an alternative to us.  Maybe the robo’s and institutional channels are only picking up business at the same rate advisers are losing it.  There’s a thought.


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.

That’s within our power to change I’d suggest.

You might also be interested in this related article:
The 10 Mistakes That Advice Businesses Keep Making
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