The infamous D-Day is almost upon us and I expect to see increasing consumer confusion once the doors of depolarisation open. Given the number of people already unsure about the type of financial advice they receive, the onset of multi-ties will surely stir the confusion pot even more.
Depolarisation is going to be both a challenge and an opportunity for IFAs. Precisely how many will relinquish their independent status for multi-ties next year remains to be seen but it is likely to be far fewer than many were predicting just six months ago.
Why? Simply because consumer demand for independent advice remains high and there will be a continuing need for this demand to be met.
If they can adapt and successfully make clear the added value of independent financial advice, it is IFAs who could turn out to be the long-term winners in the depolarised world. But much will depend on how IFAs market themselves.
IFAs cannot afford to assume that people know they are independent – they must take steps to ensure clients and prospective clients are left in no doubt about their status. This will be crucial after D-Day.
Marketing may not be a big priority for some firms, particularly those that have built a successful referral business over many years but there will be many IFAs that need to expand their client base to survive and, for them, getting the marketing message right is going to be vital.
Marketing is not simply about advertising or selling. These two aspects play a part but marketing is also about working out customers' wants and needs, delivering the goods and ensuring that at every single turn nobody is left in any doubt regarding the precise nature of the service you provide.
Unfortunately, I suspect that many IFAs are ignoring marketing at their peril. For example, IFA Promotion, which promotes 96 per cent of the IFA market with over 10,500 members, offers a service called Media Services which puts journalists from national, trade and regional newspapers in touch with media-friendly IFAs. IFAP's published Media Services directory is distributed to over 1,200 media contacts and is available online. Press coverage is an easy way for IFAs to get themselves noticed by offering a journalist informed comment or case studies on a specific topic.
Yet only 196 (around 2 per cent) of IFAP members have signed up for this free service. Between them, Media Services IFAs provide a significant proportion of all IFA media commentary.
It is useful to develop an in-depth marketing strategy and budget, taking into consideration principles of marketing such as price, place, products and promotion. But there are several simple ways for IFAs that need not cost the earth and are close at hand. Generating media coverage only costs time. Member IFAs can join one of IFAP's local press clubs to pool resources to fund advertisements and articles in the local press. IFAP co-ordinates over 30 of these regional press clubs across the UK and between them they generated around 500 pages of editorial last year.
IFAs should use material which is readily available. The hard work and time that goes into establishing a brand has been done. The IFA blue pound sign logo is now recognised by more than half of all ABC1 adults. If you are an IFAP member, make sure the logo is on your office window, on your letterheads, on your business cards, compliment slips and on your website – it makes marketing sense.
In today's high-tech world, it is vital for IFAs to have an online presence. The days of just flicking through the Yellow Pages are fading fast – it is the internet that is emerging as the research tool of the choice for the masses today. We are seeing this at first hand with four in five Find an IFA searches via IFAP now made online. The majority of IFAs have an email address, yet only half have websites. IFAs who continue to ignore the internet will undoubtedly miss out on potential lead opportunities. A website is a crucial shop window for your goods and services – it is the reason why IFAP has launched its new online marketing package for member IFAs.
Create a corporate identity that reflects what you and your business are about. Identify your strengths and do not try to be all things to all people. If, for instance, you have passed the G60 exam, then make clients aware that one of your fortes is pension advice. There are some people who prefer to talk to a female advisers and some who prefer to talk to a man. If your firm has advisers of both genders, then make sure potential clients are made aware of that fact – don't give them an excuse to look elsewhere. When people make your firm the first port of call it is vital that they have reasons, at first glance, to go with you and not someone else.
A marketing strategy should not be solely directed at potential clients. It is just as important, if not more so, to keep the customers you have on board. Keep in touch with them regularly with news and views online, by email or letters.
Additional help is at hand. Last year, IFAP dealt with over 338,000 hotline and website requests from enquirers looking for the right member IFA, generating up to £31m commission income for members. Members tell us that 82 per cent of the leads they receive from IFAP result in business. But whether IFAs use IFAP's services or not, the importance of how they differentiate themselves from the competition in the future should not be underestimated.
The menu is coming our way soon and it will demonstrate that, whichever way consumers pay for it, financial advice is not free and has real value. This is good news for IFAs because it will help customers put a true value on advice.
And who knows, if a few more consumers value independent advice properly, maybe a few more of them will be prepared to pay a fee – that is, as long as you have marketed yourself in a way that leaves them in no doubt that independent advice is what you offer.