Improved interaction will create better client relationships
Estelle Scholtz-Mare, Head of Marketing Momentum Retail
The interaction between the adviser and their client has, and will always, be the cornerstone of financial wellness and the foundation of trust between two parties. However, we have hit a cross road and need to take a step back and question whether the basis of the interactions we used to have with clients in the past will be relevant to the new-age client.
This was the crux of the Momentum DNA of Financial Wellness Partnership Forum 2015 which recently took place and was attended by hundreds of advisers
Defining the client
MMI and Momentum in particular, have adopted a client centric strategy. This means really understanding client needs and providing solutions that meet the needs of specific client groups or segments. Client adoption of technology has played a large part in this decision; and as Mark van der Watt, CEO of Momentum Retail, pointed out, clients are becoming more demanding, more diverse, and highly sophisticated.
“Consumers are starting to interact with technology and act accordingly. It is not uncommon for an adviser to sit across from a client that knows the basics of a product after they have done some research on it over the internet. We need to come to terms with the fact that all clients are different and we have to design solutions that speak to this uniqueness,” said Van Der Watt.
Adjust with the times
When facing an unconventional situation, the best way to act is unconventionally. If clients are becoming tech savvy, companies and advisers need to embrace digital channels as an effective tool to grow profits and enhance relationships.
Van Der Watt pointed out that they had built online capabilities which would allow them to test certain things with clients. They are also using other technologies to test client preferences One of Momentum’s biggest focus areas was understanding “client journeys” including each touch point, in order to enhance the client and adviser experience.
The cornerstone
While trust has always been the defining point of the client/adviser relationship, trust in the financial services industry as a whole is low.
“Building trust is important. If we do not do things right, we will never get the opportunity to do the right thing,” said Van Der Watt. He added that the financial planning process is inherently independent, it is only when advisers start to add the building blocks (products) that an element of influence may come into play.
Another issue that has been brought to the fore was the fact that the industry has not successfully penetrated the South African Middle Income market. Van Der Watt stressed the need for companies and advisers to focus on and understand the needs of the middle income market and to design appropriate solutions for it.
The desperate need
If there has ever been a market that is in need of financial services products and the skills of advisers to guide it towards financial wellness, it is South Africa. Estelle Scholtz-Mare, Head of Marketing Momentum Retail, points out that 64% of households in South Africa are financially unwell.
“There is a desperate need for financial advice in South Africa. However, trust levels in the market are low and people need to sit with their advisers in order to see their intentions. Clients simply do not know how to manage their debt. To us, the credit card becomes an extension of the sale,” said Scholtz-Mare.
She went on to add that 19 million people in South Africa have an impaired credit record and that there are a massive 11 million people who are over indebted. This has a significant impact on retirement as it forces clients to eat into their retirement savings in order to fund paying off debt. When retirement day approaches, the savings becomes water under the bridge.
Editor’s Thoughts:
Advisers need to partner with their clients on the journey to financial wellness. This may include them playing the role of risk coach and budgeting champion in order to make sure clients achieve their goals. Please comment below, interact with us on Twitter at @fanews_online or email me your thoughts jonathan@fanews.co.za.
