Making a good first impression is crucial, says Brett Davidson, managing director at FP Transitions UK, so a well-written, well-designed financial plan is the all-important first step
Assuming we know the types of clients we want to work with and we have a clear proposition to put to them, our next major challenge is how to present this to a new or existing client.
The first client meeting needs to provide 'individualised consistency'. 'Individualised' by the adviser's particular skills while presenting key messages 'consistently' from all advisers that work within the same business. The consistency need arises because of two issues.
The clients' call for a wide variety of information.
Businesses need to have a consistent way of explaining the corporate value proposition (the biggest roadblock to creating a brand).
There are many possible questions going through a client's mind and, unfortunately, we have no way of knowing which questions will be the most important to each individual. Therefore we must use a process that addresses everyone's issues professionally and relatively quickly. If you are trying to build a quality business, the process must be able to be taught to other advisers who may have less experience than you. The box (across) suggests some possible questions a new client may have.
We can summarise these into four key questions that must be answered by the end of the first meeting.
1) Who are we?
2) What will we do?
3) What will that do for you?
4) What will it cost?
First impressions last
At FP Transitions UK we have designed a generic presentation known as 'The First Meeting Storyboard' allowing advisers across a wide range of skill sets and experience to present professionally at the first meeting. By taking control of the meeting and demonstrating a strong process, you can quickly create high quality relationships and demonstrate your value added. Using the First Meeting Storyboard even junior or new advisers can demonstrate these skills to new clients, increasing acceptance of the need for advice and increasing new business written.
Once you have a first meeting presentation that works with new clients, you can put it to additional use. Converting existing clients to your new way of doing business can happen in much the same way as it does for new clients. You can simply open your meeting with &let me show you what we are doing for new clients to the business&. You can then go straight into your client presentation with the existing client and offer them a new financial plan to get things back on track. It may be appropriate to offer some form of discounted access for moving to the new service for existing clients, but you will have only one way of conducting a first meeting. This creates major efficiency benefits within your business.
Having obtained the clients' buy-in to the advice process, our next hurdle is presenting written financial advice that is readable and understandable. Most advisers in the UK do not provide detailed written strategic advice to the client. I think there are several reasons for this.
a) Many advisers do not have the required financial planning skills to prepare strategic advice documents.
b) There is a lot of work in creating a written financial plan (and therefore you must charge appropriately).
c) Clients do not like reading the typical financial plan.
d) The typical financial plan says nothing and adds little value.
But life does not need to be this way. A well-written financial plan that lays out a strategic road map for a client will take time to prepare, although this can be outsourced or a process developed internally to reduce the time taken. A financial plan can explain ideas using a simple format of Recommendation, Reason and Benefits.
Recommendation: I recommend that you purchase your commercial premises using a Sipp.
Reason: By owning the property within this structure you will have the ability to raise funding tax effectively using a combination of tax deductible borrowing from your bank, and tax effective cash payments from your company into the Sipp.
Benefits: I have calculated that following this strategy will save you approximately &78,000 of tax this financial year.
The financial plan will also use diagrams and pictures to explain the more complex movements of money, debts and structures. (See chart)
There are many situations we encounter when giving advice that cannot be explained succinctly or simply using words alone. The more complex the client's situation the more difficult it can become to achieve clarity in our written advice.
By incorporating diagrams into the plan we improve the quality of our communication to clients and we allow ourselves to work with more complex clients effectively. One reason advisers avoid complex work is not because they cannot deliver effective solutions, but more likely because they cannot easily communicate the benefits of their solutions in a way that clients can understand.
By designing a document that communicates your strategies and recommendations clearly, you can provide the client with high quality written advice that they can read. Such a document also creates a greater perception of value than verbal advice followed up with a letter, allowing a higher fee to be charged for your advice. The financial plan also becomes your compliance document for the future.
The final point to make regarding the written financial plan is that it probably should not be posted to a client. It needs to be presented and explained in layman's terms so the client can then read it with knowledge and understanding. Use of interactive computer technology in front of the client also adds tremendous value if used well in the explanation process.
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