Who owns the relationship?
Client, Practise, Adviser

 The financial planning industry has focused on quality with all good intentions in recent years including quality advice delivery, fee disclosure, communication and education. While many initiatives have been successful, providing an overall higher quality outcome that has both benefited the client and the industries reputation significantly, long-term service continues to be the path to success. 

As a profession, we want clients to not only seek advice but to act on the advice their financial adviser (the adviser) recommends evidence supports that this is in the client’s best interest. According to a survey by Wealthwise; four in five Australians that sought financial advice reported due to advice they were able to achieve their financial goals. (1) 

The point of this discussion is the client – adviser relationship and the importance of this relationship in advice delivery. If the client benefits from advice, then a sustainable adviser-client relationship to service the client throughout their advice lifestyle is just as important.
Have you speculated in detail about what is the objective of your client facing business? To both service your current clients for the long term, and then to continue to build a sustainable business? If so, could the business challenge be to deliver ongoing quality advice, communicate and educate clients, and retain staff to supply ongoing quality service. 

In best practice, the adviser presents a long -term strategy to the client. This commences from the initial meeting when uncovering the client’s goals, forming a strategy, presenting a financial plan and delivering ongoing service. When the relationship and the advice strategy are managed well, the advice should benefit not only the client, but arguably also the generations that follow. The advice must then be based on trust, understanding, and belief in the adviser, and so the relationship begins. 

Accepting advice is a response that reflects trust in the adviser-client relationship.
Let’s explore who owns the relationship and how the relationship affects client retention. I have personally managed more than two hundred advisers in my career and then as a consultant set up the client to adviser processes for more than a dozen dealer groups. While it’s often argued that the practice, the dealer group and/or the organisation own the client, I have one question; whom does the client ask for when they call, email or write? 

Based on my experience the client will refer to the person they believe they have the relationship with. I invite you to ponder this simple yet complex question for some time. I assure you it is a question that comes up and is regularly argued in executive boardrooms.

Therefore to retain a client long-term, it makes sense not only to deliver quality advice but also to deliver a long-term relationship. When advice touch points are considered, the client must be regularly contacted to have an ongoing relationship with the company and feel that financial planning is a supportive and enduring relationship. You should want your client to call you when a trigger event occurs, and an effective contact strategy may in turn identify potential trigger events. 

As a company it is imperative to offer the client a comprehensive relationship with their adviser and the business. Therefore, a long-term service delivery includes both client and adviser retention. 

To deliver a sustainable service and enduring relationship to the client, it works best when the adviser appointment with the organisation is also long- term, enabling the longevity of service. Retention of the client-facing advisers within the company gives the client the ongoing security of the advice relationship for which they have subscribed. This is an approach devised to achieve industry objectives, which is clients that act on advice, regular reviews throughout the client’s lifetime, and eventually intergenerational advice. To support this theory of ongoing support, the company and the team are a critical part of the relationship. 

Staff and Client retention is where A Perfect Plan’s offering is focused. We understand the process required to attract, grow and retain your client base. Equally critical to your business is to attract, retain and grow your staff, and this business relationship is of immense consideration for the practice principal, or organisation. This solution is to provide an environment that is supportive of the advisers committing to the practice as long-term engagement. Within the industry the bar on who is acceptable to advise the Australian public has received a lot of attention, and the industry is attracting highly educated and ambitious people. 

There is also a significant cost to hiring a new adviser particularly in their first year. The nature of planning is long term. It can take months for the advice to come to fruition, and many months before the adviser is starting to cover their costs. Therefore the new hire requires a commitment from all parties. 

Establishing staff commitment is not dissimilar to establishing trust in a new client relationship, where a good quality induction is absolutely fundamental. The financial adviser must feel from day one they have made the right choice. Similarly the principal and team also are looking for reassurance of the right fit. These considerations are not dissimilar to the on boarding process in any corporation; therefore how does the practice best manage this process? 

The answer is similar to the way the client relationship is managed and advice is delivered with clear and concise communication, supported and documented. The agreements between both parties, whether written in the employment contract or via verbal interaction, are effective when evidence of a robust process gives both parties’ clear and concise deliverables and the required support for a long-term relationship.

To know your adviser/ employee/ team is to know their goals and objectives and clearly understand how and why they work. Strengths profiling and values identification are tools that give important insight to all parties. They provide an understanding of how each person delivers to their strengths, and can provide a manager with valuable insight into how best to manage an employee for the desired result. According to Gallup, Strengths based training and insight can result in an 18% increase in productivity and a 23% increase in profitability. (2) The profile results contribute to the employee contract, a tool for the manager and employee to refer. 

Similarly, the contract would contain the employee’s development plan, a living document that also contains development expectations. The professional development plan includes the adviser’s own commitment to development and coaching required and proposed. It becomes vital in regular coaching and commitment discussions. The document must contain Key Performance Indicators expected by the practice and agreed to by the adviser and must include the role description, focus areas, alongside dependencies to achieve targets. Target timeframes must be achievable, deliverable, and written in clear and concise language. This document serves as the discussion framework for years to come and should be reviewed and updated regularly. 

Setting up a framework as recommended, is a commitment and many practices may need to seek external support to do so. However the framework is invaluable and it will save potential expensive misunderstandings. Having a clear and concise framework gives both parties a measurement of success. When the on boarding of a new adviser can be so costly, and you know eventually the client will contact the organisation and ask for the person they have the relationship with why leave anything to chance? 

The desired result is a long -term commitment to the practice and confidence the employees and the employee are sharing objectives to build a future together that will provide the best long-term advice and service to the client.

1. https://www.wealthwise.com.au/is-it-worth-paying-for-a-financial-advisor/
2. https://www.gallup.com/workplace/285674/improve-employee-engagement-workplace.aspx

By Nina Witenden
Director at A Perfect Plan
AdvDipMartMgt, GradCertMgt, ADFS, MMgt.
https://aperfectplan.com.au