Advice on re-engaging under FOFA

Wealth Professional
October 15, 2013 AEST

I get a feeling that 10 to 30% of a client base is a fair representation of disengaged clients across Australia.

Hans Egger, Creator of the Astute Wheel Client Engagement Platform

Hans Egger: In my mind a disengaged client would be one that hasn’t had a thorough review for at least 2 years and doesn’t feel that they have an active relationship with their advisor. I have spoken to well over 500 financial planners and one of the areas that they are really interested in is the tools that we’ve got for disengaged clients. And I get a feeling that 10 to 30% of a client base is a fair representation of disengaged clients across Australia. Let’s put yourself in the shoes of the disengaged client for a minute. You receive a fee disclosure statement, a letter saying that you’ve been paying fees to someone that you haven’t seen for many years. Now the higher the fees and the longer it’s been since you’ve seen that advisor, the more likely you are to question why, why are you paying these fees.

Now from an advisor’s perspective they know that they give good goals based advice and that if that client was to come in for a review meeting, they would be better off as a result of it. But how do they get that message across in the 4 or 5 minutes that they’ve got on the telephone with a client that’s not exactly happy with them. An alternative is obviously to get that client in prior to the letter being received, that way they get an hour or more to be able to go through and do a thorough review, find out what the client’s needs are and really address those needs and leave the client in a better position.

But the industry has given us a problem and that is that through the FOFA legislation we now have to give more thorough and longer reviews because we’ve got a best interest duty for our client, we have to dig deeper. So the client really has to ask themselves if the review process is going to be longer and if they have to give more reviews as a result of this, does the financial planner have a thorough review process that’s compliant? Is it an efficient review process that can be done in a reasonable length of time? And is it repeatable process that’s easy to do again and again and again and is it a process that the client ultimately finds valuable?

There are tools that make the whole process more efficient. So the client can provide information prior to the review meeting rather than that taking up time in the review meeting. Then in the review meeting there are education tools, there are presentations tools and there are modelling calculators which allow the client, the financial planner to easily explain the depth and breadth of the financial planning process and show in real time how various strategies are going to assist that client to achieve their objectives. And end result is you have a happier client that’s happy to pay the fees and ultimately will refer more clients to you.


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