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Loyal Approval

Short-termism is an accusation that has long been levelled at the British

way of doing business. But things move on. Supermarket loyalty cards have

been introduced and brands have been formulated that insinuate themselves

into the very fabric of the consumer&#39s life.

In short, initiatives for holding on to customers and developing long-term

relationships have become the norm and this applies to IFAs as much as any

other business.

Alongside this, what needs to be taken into account is the recent changes

to the environment in which IFAs are operating. With the increasing

regulatory and media scrutiny on up-front commission comes its gradual

erosion in favour of trail commission or fees. Correspondingly, the focus

of the interaction between IFA and client moves away from the initial

moment of selling and on to the long-term relationship.

If IFAs agree on the importance of ensuring business over the longer term,

the app-roaches they take to achieve this differ.

Berkeley Independent head of marketing Sally Reeves says one of the things

IFAs will have to do is sell advice actively and to convince clients of the

added value that an independent adviser can bring.

Reeves says many network members have service agreements with clients,

usually paid for on a quarterly basis. As part of these agreements, they

get, for example, monthly updates, newsletters and invites to corporate


Reeves says: “Dozens of people are marketing the same products, so we need

to see if there is some extra benefit we can offer to build the

relationship with the client and pass any benefit on down the line.”

She says the networks are best placed to do this with their bargaining

power to secure the best rates from providers. These are often deals that

the customer would not get by going direct.

Reeves says many advisers recognise that clients might want to go direct

for some products and some advisers will try to acknowledge and accommodate this by allowing this to take place through their own websites. But where there

is a need for face-toface advice, she thinks this should be holistic.

An important element in maintaining customers is having good admin. Reeves

says: “When I hear IFAs say that they have 2,000 clients on their books, I

laugh. How can you possible service them properly?”

Other than tailoring the amount of clients you have to the admin support

that you can offer, Reeves also suggests that clients should be introduced

to paraplanners and other admin staff so that they have a familiar face to

go to with routine enquiries that might not require the attention of IFAs.

Applewoods Associates head of marketing Claire Rob-erts says maintaining

existing customers is more important than attracting new clients.

She feels that the two are interlinked in any case as most new clients

come as a result of recommendations from satisfied existing customers.

Applewood Associates has a two-pronged approach to maintaining customer

loyalty. On the one hand, it offers “jollies” in the traditional sense such

as investment seminars to which existing clients are invited. These are

then combined with a day of golf or meals arranged by the firm.

On the other hand, clients receive a bimonthly in-house magazine and

mailshots. Every three months or so, clients are also contacted to see if

they are happy with things and feedback is invited.

Newsletters are a popular way of keeping in contact with clients. The

Financial Planning Service principal Julian Crooks also sends out regular

newsletters, partly because he believes his clients are likely to get them

from other IFAs. “If you do not keep on reminding your clients who you are,

you risk losing them,” he says.

Crooks buys a pre-printed package but sends this out with a covering

letter on the issues which he feels are topical. He sees himself as acting

as a filter, dealing with the news stories, and often scare stories, that

clients may have read and weeding out the wheat from the chaff.

But above all, Crooks thinks the traditional qualities of giving a good

service and making sure you do your job well are the primary ways of

ensuring long-term business.

At present, the consumer debate is primarily focused at the level of

comparing channels and, given the debate over the polarisation review, this

is perhaps inevitable.

But once the dust has settled, some think the consumer debate might become

more finely tuned.

Rather than arguing over the merits of going to see an IFA over buying

direct, perhaps the performance of individual IFAs could be compared.

Imagine an FSA performance table for IFAs.

Crooks, who is one of the few advisers who are Certified Financial

Planners and whose business is predominantly fee-based, says: “I always

introduce the subject of commission and make it clear what people are

getting for their money. IFAs who are not transparent with consumers will

risk a consumer backlash.”

John Stones


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