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The winds of change

Many broker consultants and IFAs will remember a golden age where consultants called on IFAs with rate cards and a suitcase full of props.

When you compare those days with how IFA broker consultants operate today, with skills such as relationship management, technical, report writing, problem solving, account management and sales ideas the industry should feel proud of the advances it has made.

The product providers have invested heavily in the development of their people and should equally feel proud of the commitment they have made to IFA sales development.

However, broker consultants cannot afford to rest on their laurels if they are going to continue to win market share from their IFA panels. IFAs are now asking more questions of the consultants that call upon them and see the broker consultant doing as their job title suggests, which is to act as a “consultant” to the IFA business. This means broker consultants need to upskill to become business management consultants to their key IFAs.

We have seen this shift of skills in other industries, particularly within the technology sector, where IBM took the decision that, in order to improve its falling market share in sales of computers, it needed to rethink its sales strategy radically.

It came to the conclusion that if it could support and help the development of the businesses it sells computers to, then, as the customer grew and required more computers, IBM would be well placed to provide them. And so the new sales consultant was born within IBM and it retrained its salespeople to become business management consultants working on their customers’ businesses issues and growth strategies.

This change of direction from a transactional approach to the new method of a “transformational” approach is known as consultative selling. And right now, due to the pressures that IFAs are under, those broker consultants that learn the skills to help their IFAs to improve business performance will lead to an increase in market share.

However, there is no quick fix as this type of development cannot be done simply by attending a training course for a few days.

This is a journey of real development and behavioural change so providers who want to see their consultants become “IFA business consultants” need to design a structured development programme that allows the consultants to learn new skills, have time to practise them, review and monitor before they implement their new skills in the real world.

Each programme should be made up of different modules that teach broker consultants how to analyse a business, to understand the performance issues of a business and then work with the IFA to construct the right strategies that focus on financial performance, customers, process and people development that will lead to an overall increase in IFA performance.

In addition to this, the providers also need to understand how and why they should change the performance bonus systems they operate from a purely sales-driven bonus, paid on percentage of target achieved, to one that rewards behavioural change and reflects the level of real business activities that consultants do with their IFA customers.

Product providers also need to identify how they are going to do this and with whom, as IFAs fall into two distinct camps – those who want consultancy advice and those that do not.

IFAs who do not are labelled “transactional buyers” and broker consultants need only to continue working with them in the same methods they have been doing. However, the other IFAs labelled transformational buyers are asking for a business consultancy approach.

Those providers and broker consultants that can offer themselves as business consultants will inevitably be the winners in an already highly competitive environment.

What the future holds for broker consultants is the opportunity to develop into a business consultant, to enjoy the development journey, which will find them working right at the heart of their key IFAs as true business to business partners. They should find themselves valued by their IFA customers as agents of change,who add real value and contribute to the bottom-line performance of the business.

Broker consultants should look to work on the IFA business as a way of gaining market share and should stop working to win business by selling products to IFAs.

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