These days IFAs talk about obtaining chartered status, the introduction of adviser charging and how they are ensuring the technology is right from wrap to suitability tools. These areas will continue to form IFA chatter in the run-up to the retail distribution review.
What strikes me is the lack of emphasis on marketing and PR. I am pleased for the chartered firms that have switched clients over to fees and announced they are RDR-ready, even though we do not have the regulator’s definition of what RDR-ready is. But what worries me is the quality of the communications sent to existing clients and the lack of marketing and PR to attract new customers.
For the first time ever, IFAs need to attract clients that are fee-tolerant. Such clients tend to be sophisticated and therefore the way in which the information is presented to attract their attention also needs to be sophisticated.
Marketing is defined by the American Marketing Association as “the activity, set of institutions and processes for creating, communicating, delivering and exchanging offerings that have value for customers, clients, partners and society at large”.
This certainly applies to the offer of independent financial advice for society. Every client-facing bit of paper, online mentions, social media and email form marketing tools.
I have various IFA client reports that have been passed to me as examples of good practice. The commonality is colour pie charts, lines and lines of compliance and most follow the same order. In some the client’s name is not mentioned apart from on the cover, the value of financial advice is not mentioned, the amount of tax saved if the plan is implemented is not mentioned and so on.
A personalised financial report may be kept by clients for life. It is the document that will decide whether or not a client takes action and forms the basis of all future planning. As a result, basic marketing principles should apply so the document acts as a call to action. If everyone in the UK who has been given a financial report acted upon all the recommendations, I am sure the savings and protection gap would not exist.
As for online marketing activity, IFA websites do not need to punch the lights out unless they are transactional but surely each IFA firm needs a website. I can name dozens that have no online presence at all and this is not right. According to IMRG, the UK is Europe’s leading e-retail economy, with sales having reached £68.2bn in 2011. More than 50 per cent of Britons shop online and this is reflected in how they find their professional advisers.
The use of social media in financial services suits some and not others. IFA Martin Bamford gets new business and contacts by being active on Twitter and Facebook while others stick to the more straightforward LinkedIn.
Twitter seems a step too far for some as the compliance rules appear too scary – but they are not. See a social media compliance guide I have written at www.unbiased. co.uk/social-media-rules-those-regulated-fsa.
If all of advisers’ time is spent gaining more exams and building shiny processes without implementing a basic marketing and PR plan that works, 2013 may be the year of advisory firms going bust – and not because of the RDR.
Kim North is managing director of Technology and Technical