Financial planning businesses invested heavily in preparing for the new fee disclosure statement (FDS) regime and can now either embrace the opportunity to secure a return on their investments or squander it, according to financial planner Hans Egger, co-creator of the AstuteWheel.
“Planning practices spent a great deal of time, money and effort organising their client databases and polishing up their client value propositions in readiness for the FDS regime,” Mr Egger says. “And, like a nation upgrading their infrastructure in preparation for a war that never eventuates – termed a ‘peace dividend’ – they can take advantage of perhaps the best-organised office they have ever had, or waste the opportunity.”
Mr Egger says planners now have the opportunity to:
- Continue to strengthen relationships with active clients by articulating the service offering, offering goals based advice and transitioning them to ongoing service agreements
- Re-engage with non-active clients and upgrade them in terms of the services provided
- Generally increase and secure ongoing revenue streams across the practice
In 2007, during the war in Iraq, Mr Egger says the US Army conducted a ‘surge’ strategy – 20,000 troops had their tours extended and new troops were added in some of the most dangerous areas. He believes the overwhelming increase in resources had a profoundly positive effect on the outcome of the conflict.
“Employing a surge strategy for reviewing clients should provide a similarly profound and long-term benefit to planners’ businesses,” he says. “Businesses should, therefore, take this opportunity to contact those clients who haven’t been reviewed for many years and identify ways to add value and broaden their services offering.”
In keeping with the military analogy, Mr Egger says the final tactical advantage often requires a ‘force-multiplier’. “In 2005, the Australian SAS started introducing dogs into the conflict in Afghanistan. These dogs proved invaluable in house clearances as they could sniff out explosive booby traps as well as enemy soldiers in rooms that hadn’t been cleared,” he says. “The result was more effective operations with less loss of life to Australian soldiers.”
In a financial planning context, a force-multiplier could be the use of technology to more efficiently and effectively conduct reviews.
“If you can increase the number of client reviews you conduct this year and provide your clients with a better appreciation of the value you offer them as an adviser, then not only will you have a stronger relationship with your clients but your revenue will also increase.”
Mr Egger urges planners not to waste the opportunities currently presenting themselves.
“You have done most of the hard work already,” he says. “Your practice will no doubt face new conflicts in the future. It will be the practices that strengthened their positions in 2014 that will survive and thrive in the future.”
No ‘one-liners’ for client value proposition