A new breed of client in the future space of advice
Financial advice will be your best product ever in the future, and the best thing is that you can decide what this product looks like. This was the sentiment that opened the 2015 Financial Planning Institute’s (FPI) Retirement conference.
A major talking point at the conference was the future space of advice and how advisers will interact with a new breed of client that acts differently to any other client they have dealt with in the past.
An issue of irrelevance
“The customer of today is not the customer of yesterday. Therefore, the lessons that we carry forward to our new clients could be seen as irrelevant,” said FPI Chairperson, Sankie Morata.
Morata added that clients in South Africa lack financial planning and knowledge around basic financial matters. It is up to advisers to take this education to clients and to empower them as the country stares a recession in the face.
“We need to find new ways of communicating and transacting with clients. We need to create or facilitate an environment that encourages education in the industry. We need to upskill the masses,” said Morata.
Money + Meaning = Magic
We work our whole lives towards retirement. But when that day comes, what do we do with all of the free time we have? Kim Potgieter CFP, CEO of the Financial Services Planning Board, says that this is a problem in society that needs to be looked at in an effective manner.
“Many people retire on purpose and not with purpose. Retirement is a time of life where a person lives out unfulfilled dreams in their own time and on their own terms. But this doesn’t mean that we need to look at retirement through the lens of doom and gloom,” said Potgieter.
While many advisers only look at a person’s financial plan when planning for retirement, Potgieter believes that a client’s life plan also needs to be taken into account. “Get to know your client’s dreams and goals and then develop their retirement savings plan around this. We cannot ignore this because these two issues are not mutually exclusive, they are intertwined,” she added.
One of the main aspects that needs to be taken into account is your client’s interaction with their money. Potgieter said that advisers should not be scared to ask their clients what their first money memory is and how it has shaped or affected their life.
“Ask your client what money means to them, because it can either empower or inhibit them. If your client had all the money in the world, what would they do differently? It is imperative that clients retire towards something and not from something,” said Potgieter.
Balancing the scales
If we think about it, we go through our whole working life with the message of save, save, save; but when we do retire, we are told to spend, spend, spend. This requires significant capital. Clients need to trust their adviser enough to know their money will not run out.
We are coming to terms with the fact that clients are increasingly looking to retire with a purpose. That they will be retiring to something and not from something. But what can retirees look forward to in retirement? Potgieter points out that in the plans she has done for clients, a few common themes come to the surface. Clients want to learn, they want to maintain their state of health, they want to play, some want to continue working, some want to give back to their community while others want to build on their relationships with children or grandchildren.
Finding the niche
This is a lot of information to absorb. Considering the fact that the client of the future may not want to sit with an adviser for hours planning their future (although they should) the adviser of the future needs to look for other ways to get this information from clients.
To a millennial, time is money and money is time. While they may not be able to block out a whole session to sit down with an adviser, the adviser can engage with them online in a series of shorter virtual meetings. Kate Holmes CFP, Founder and CEO of Belmore Financial, points out that the global online village is growing and that two out of three South Africans are online the majority of the day.
Trust is a significant component of the retirement planning equation. Clients need to trust you and trust the products you are offering to them. In the past, clients were drawn to you by referrals from other clients. Now they are going online to read up about you and your product. Holmes says that an adviser needs to show their personality online and this needs to resonate with them.
Certain millennials are also opposed to reading through reams of paperwork to find out what the benefits of a product are. To this group, online multimedia content is key. It may be key then to answer questions clients have about products through videos. If they are busy and only have time to talk between meetings, schedule skype conversations or have email conversations with clients. The adviser of the future needs to be tech savvy.
Editor’s Thoughts:
Millenials want to change the world. They feel that they were brought onto this earth to fulfil a specific purpose. If they do not achieve this in their work life, they will most probably pursue it in their retirement. An effective retirement plan needs to come to terms with this. Please comment below, interact with us on Twitter at @fanews_online or email me your thoughts jonathan@fanews.co.za.
Comments
This by the way includes millenials, as they are quick to sense when someone feigns concern for their welfare, when all the latter wants to do is drive them to purchase a specific financial product. Report Abuse