Standard of service
Standards are important and that is why I find Twitter such a challenge. I have no interest in people’s kittens running over keyboards and one more comment on exercise machines may push me over the edge but part of the problem is that tweets are limited to 140 characters.
Social media will evolve and the challenge for businesses will be to use it to positive effect. Traffic on websites does not pay the bills. As planners seek to make the case for the value they add it will be essential that all the touch points support each other in reinforcing the client relationship.
Research continues to peddle the idea that consumers want advisers to cost less per hour than motor mechanics but those asked probably did not know what they were charged for labour at their last car service or repair. What galls me about these surveys is they ask someone about something they can’t possibly have any knowledge about and then act surprised or, worse still, vindicated about the answer.
A recent Which? survey focused on transactions and then talked about advice. This makes me wonder if it knows what advice is. I hope it does. After all, doesn’t it advise on mortgages?
Too many advisers have focused on transactions over advice or masqueraded as investment experts. As 2013 approaches, the time to demonstrate value is upon us all. We need to take the costs out of transactions, which could impact on platform charges. Coupled with that we have an early day motion in the House of Commons with MPs debating funds costs, putting the wind up those with total expense ratios in excess of 1.5 per cent.
It is only logical that pressure would alight on the investment fund world eventually but I am not sure that has been grasped by most investment houses. If advisers need to cut overall investment costs then they are not prepared to be the only ones taking the hit. This pressure applies to platforms as well as investment houses and fixed costs may be the solution. However, average holdings could make this problematic for many operators.
No pricing model is sacred and the sooner we realise that the better. We must educate the clients on the value we deliver but also continually look at how we take costs out of our processes. The new regulator needs to understand this and take an active role. This changing environment will not tolerate inefficiency or arrogance, no matter who displays it.
The debate has started. Let us take part in gathering the evidence where we pay for service but do not receive it.
Service will be the key point of differentiation for providers and advisers alike. Money Marketing Service Ratings will deliver the necessary resources to evidence good and poor service when justifying provider selection or avoidance.
Windsor Life became Re-Assure but a name does not a brand or reputation make. Providers take note, as your grip becomes increasingly tenuous, service needs to be at the centre of your plans.
Robert Reid is managing director of Syndaxi Chartered Financial Planners