For many people outside the profession, financial services is one of the dark arts. This is hardly surprising – there are 40,000 advisers in the UK, with probably several hundred different ways of advising.
Are you a transactional adviser, a wealth manager or a financial life coach? Do you work on fees or commission? If fees, do you charge an hourly rate, trail or piece rate? My own clients know what I do for them and what I will charge.
But the big unknown is how many clients are deterred from seeking our advice because they are not certain of what they may be letting themselves in for in terms of cost? This is where our historic failure as a profession to clearly communicate the benefits and value of what we do is at risk of coming back to bite us.
In theory, anyone in business should have what the Americans call an elevator pitch – a concise 30 to 60-second script that clearly defines what the business offers to anyone lucky enough to be trapped in the eponymous elevator on a quick ride between floors. It should encapsulate the value of our service to the client and motivate them to hire us, preferably on the spot.
Thirty years ago, if you had asked me for mine, I might have said I sell life insurance. Eighteen years ago, I would have majored on my newfound independent status and at various times since I have been an IFA, wealth manager, mortgage broker, employee benefit consultant and a financial adviser.
But all these titles, which probably mean something to others in financial services, do not mean much to clients and certainly do not represent
a halfway decent elevator pitch.
After the RDR, when we proclaim a title and demand a fee, clients may well not vote in our favour with their chequebooks. Independent or restricted status may not mean much to them and you can bet that all those who are restricted will try and turn it into a virtue and
for some it may be.
Chartered or certified status may help but again titles mean more in the industry than they do in the public’s eye. So this is where a clearly defined and well argued pitch is critical. It is perhaps why the RDR may have one surprising benefit. It will cause advisers to properly examine what they do, what they need to charge for it and how they present it to clients.
We probably all mostly deal with no more than half a dozen generic client profiles. So for each we need to be able to say for a client in this general situation we will do ABC and we will charge £x. We will recover this in the form of z.
Simon Webster is managing director at Facts & Figures Financial Planning