Analysis of the outcome of the referendum has been extensive and there are many issues still to be resolved. Indeed, the Donald Rumsfeld “unknown unknowns” applies perfectly to the current circumstances. But all of this provides the perfect backdrop for client retention and acquisition, as well as stealing back some of the momentum from the robo operators.
Previous events have proved that uncertainty and rocky markets increase demand for face-to-face advice. People lose confidence in their own judgments and decide to speak to an expert. Overnight, the key differentiators of professional advice come into sharp relief. Clarity of thought, objectivity of advice and understanding of perceived complexity are suddenly in great demand. And the longer the period of confusion, the more rapidly demand will rise.
Prior to the referendum many advice firms communicated with clients. There were great examples of how to settle the nerves and remind clients of the value of long-term investment strategies, how to approach any “buying opportunities” and the benefits of trusting an adviser to work through the turbulence.
This is so different to 20 years back when economic crises often led to a communication vacuum, with clients uncertain of what to do and unable to speak to their adviser. Development here is great testimony to the growth of proper financial planning and the education of clients that is part of it.
So where do we go from here? There are some dangerous traps in game changing situations because we often forget to apply the disciplines of business and marketing planning. If there was ever a time for good business practice to prevail then this is it.
First of all, there is nothing in the result or the uncertainty that directly effects the overall scale and scope of the advice market. There may be some fall in confidence but that will be balanced with a rise in demand for expert advice. For most businesses (unless they passport into Europe) strategy will be largely unaffected.
The major challenge lies with taking the marketing opportunity to further strengthen relationships with existing clients and acquire some new ones. The well-known methods of acquisition and retention should be applied, depending upon the maturity of the business.
Mature practices wishing to build business value will major upon client retention and the main techniques to choose from are as follows:
- Targeted emails
- Targeted social media (for example, Twitter and Facebook)
- Website client area
- Service calls
To decide on how much effort to put into this opportunity to bring existing clients even closer you should answer the following questions:
- Do you have a lot of clients (say, over 40 per cent of your client base) who are of value to you but you do not see or contact regularly?
- Do you find that clients you see less frequently have made their own financial decisions or seen another adviser since you last saw them?
- Are you concerned that you have not informed clients about the implications of the vote?
- Do you find that clients do not recognise the full breadth of your expertise and services?
If you have answered “yes” to the above, you can use the twists and turns of the next couple of years to run an effective communications campaign to take advantage of the latent demand existing in the client base. A structured campaign where you communicate when there is something to talk about (and there will be plenty) and where you can personalise will pay great long-term dividends.
If your strategy includes significant new client retention, then use these well-known techniques, in order of preference:
- Professional introducers
- Client seminars
- Direct marketing (for example, letters through to social media)
Periods of uncertainty provide a perfect opportunity to promote the benefits of professional advice. Emphasise objectivity, qualifications, experience and market knowledge because this is exactly what people look for when they are unsure what to do. Indeed, if their own investment decisions are looking like poor judgement you simply have to demonstrate how you reduce their risk of repeating the experience in the future. Make sure that people understand the rigor of the planning process and the structure that you use to keep their plan and associated investments on track. You bring clarity and consistency to people who may be confused and, in financial terms, disorientated. All the time you have invested in developing your service proposition will now pay back. Ensure that all your advisers use it.
As always, we must come back to Earth after the excitement and apply approaches that are familiar. Confirm your target markets, the frequency of communication, the mix of methods, the small number of key messages and calls to action, and how you will measure response. If you can be as organised with this as you are with client plans and portfolios, the outcome of the referendum will provide a boost to your business, whichever way you voted.
David Shelton is a consultant at Stoke Bishop Associates