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Phil Wickenden: We are loyal to the whole package, not just the price

Phil WickendenThe pursuit of lower charges  – the so-called race to the bottom – has become an obsession in our industry.

But with charges, fund ranges and core features converging, platforms and providers will need to look beyond the basics in order to thrive.

Stripping out costs that do not drive value and being competitive on price are clearly important.

But that should be just the start. Beyond the functional things, such as cost and fund choice (which will not differentiate anyone for much longer), it is the total experience that makes advisers react.

Personalised and targeted business and technical support are great examples. Advisers are loyal to the whole package, not just the price.

A reactive service waits until something is requested or, worse, broken. Providers that have built their infrastructure purely around response leave it up to the challenged adviser to go to the trouble of finding them, contacting them and then looking after themselves until the provider helps resolve things acceptably.

Post RDR and under the burden of Mifid II, adviser support offered by platforms and providers has gravitated to the remote and the reactive under the (partly mistaken) assumption this will not compromise adviser relationships while reducing overheads.

Although the latter is an immediate benefit, the missed opportunity from dialling down proactivity and personalisation is significant. It is also hard to imagine the long-term net position being positive.

There have been marginal industry improvements in two key proactive measures – practice development support and business generation ideas – but the delivery gap has widened due to increased expectation and requirements from advisers.

As alluded to last week, proactivity can be expensive, but it also generates loyalty and that elusive quality – trust. In the long run itpays for itself.

Everyone looks for different clues and cues to answer the primordial question: can I trust you? But no one decides the answer to that question based on fine print, policies, proposition or pricing structure alone.

Most decisions are made before that point, because advisers watch what providers do. They watch with the sound off; they listen to others and they seek out the tiniest of clues. There is often a difference between what advisers say is important and what truly drives them to do business with someone.

Phil Wickenden is managing director of Cicero Research

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