Tactical advantage to FDS

Wealth Professional
February 10, 2014 AEST

Financial planning businesses preparing for the new fee disclosure statement regime can now either embrace the opportunity to secure a return on their investments, or squander it, says financial planner Hans Egger.

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,” Egger says.

“And, like a nation upgrading their infrastructure in preparation for a war that never eventuates – a ‘peace dividend’ – they can take advantage of perhaps the best organised office they have ever had, or waste the opportunity.”

Egger, who co-created client engagement tool Astute Wheel, says planners now have the opportunity to:

  • Continue to strengthen relationships with active clients by articulating the service offering 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, 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. Egger 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 similar profound and long-term benefit to planners’ businesses,” Egger 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.”

Sticking with the military analogy, 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.

“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.”

Egger thinks planners should not waste opportunities currently presenting themselves.

“You have done most of the hard work already. 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.”

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