Future fit, today and in the future - Part 2

27 March 2018Myra Knoesen

Kobus Kleyn, a Financial Services Professional (FSP), highlights that it is crucial for financial professionals to be aware of the ‘big picture’ developments and disruptors within their areas of specialisation. “Failure to do so compromises the hard work that we have done towards gaining recognition for the advice profession and sustaining our practices and client bases.”

Developments and disruptors

Kleyn highlights eight trends. In part two of this article, we will cover the last four developments and disruptors and they are:

  1. Mobile platforms -Mobile devices (specifically smartphones and tablets) are revolutionizing consumer-based industries worldwide. Financial advisers will therefore have to embrace mobile devices and find ways to offer services to clients and prospective clients within a secure environment. The mobile device will become an all-in-one enabler for computing, search engines, online purchases and payments, healthcare needs, communication and so much more and its utilization will vary significantly across the generations that your practice services.
  2. Adviser and advice gaps - The rising cost of advice is undoubtedly at the core of the advice gap, with regulation singled out as a major component of this. To replace those advisers who retire or simply exit the industry (due to their inability to rebuild their practices to accommodate regulatory reforms) will take many years as incoming advisers will have to go through training, pick up experience and finally pass a certification process. You must pay close attention to the possibility of both advice- and adviser gaps developing in future years. It will create huge opportunities for advisers who are building sustainable fee-based practices, as they will be able to pick up the ‘orphaned’ clients and in so doing ‘write’ enough new business to generate enough passive income to grow their practices.
  3. Value proposition and differentiation -Creating a significant value proposition and differentiated model is the only way for advisers to deal with rising costs and reduced income streams that awaits us under RDR and similar regulations. It will take careful planning and a sensible mix of a number of key components to position your practice to take advantage of this trend. Clients will only be willing to pay for advice at the right price and for the right value proposition.The bottom line is that you will have to build your value proposition by focusing on your credentials, accreditations, affiliations, qualifications, knowledge and experience as well as your volunteer and pro-bona work.Your challenge is to create a personal branding and industry-wide presence through social media while remaining true to your profession.Clients love experts, and the more of the above ingredients an adviser has, the better the perception to potential clients. You have to be different and stand out and you have to move away from selling products only.
  4. Longevity- The fact that people are living longer and have more wealth to protect presents advisers with many opportunities. Financial advisers will have to assist their clients in generating enough wealth to sustain their lifestyles for many years in retirement. The longevity trend creates huge opportunities within the retirement planning and risk planning disciplines as insurers tweak their product offering to accommodate the change to whole of life risk products and guaranteed retirement vehicles. From a practice management perspective, we will have to address this trend by ensuring that we have succession and continuity partner planning to pass the baton.

“The current and future financial professional is well advised to stay abreast of market trends, today and in the future. You must become an innovator and leader within your industry and profession rather than a late-adopter and follower,” concludes Kleyn.

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