My sister-in-law is a lovely and impeccable lady with a penchant for the odd designer label. When my father-in-law sadly died unexpectedly last week, she travelled to be with the family at no notice, without packing even a sock. Eventually, she had to stock up on emergency clothing at a well known discount store. One evening, we ventured out to a country pub. Upon arrival, a local resident perched amply at the bar looked her up and down and tutted loudly at her casual attire.
It was such an inappropriate misjudgement that it reminded me of the paradigm shift described by Stephen Covey in his excellent book The Seven Habits of Highly Effective People. Had the resident been informed of the events of the previous few days, her reaction may well have shifted from disdain to sympathy.
As financial professionals, we have all probably learned one way or another that we should never judge a book by its cover and we should approach each potential client with an open mind.
I have just met a frustrated new client who was turned away by her bank and two IFAs on the grounds her pension-sharing order amount was too small for them to service. It was a low amount but she was prepared to pay a fee for the advice. I could not see where the problem lay.
Which leads me to client segmentation. It is necessary from a business perspective to refine the service to clients but not always easy to do it in just one way – typically assets under management. If profit is akin to success, then success can be defined in more than one way.
The recurring income that clients generate is crucial but how much of my time do I need to invest to create it? Geography is key. I have slowly cut back on my London work to concentrate on Cambridge because life is less stressful and expensive without the commute. I have more energy, and my days are more constructive – so to me that is a form of profit.
Many of my so-called “lowervalue” clients respect my time, do not phone me unnecessarily, appreciate what I do and are great referrers of my services. I could therefore classify them as “higher value” because they are not energy sappers or timewasters and they keep me afloat, as I do them. They expect to pay for advice and always do without a quibble.
I remember Peter McGahan saying not many people are remembered on their deathbed for the size of their wallet. I would like to think I can value people for more diverse reasons too, and not just because of the clothes that they wear or their bank balances. Profit is a lot more than just money.
Fiona Sharp is a chartered financial planner at Almary Green Investments