It is easy to get frustrated with compliance work, says Brett Davidson of FP Advance, but if you box clever, it can also be a valuable marketing tool
You only have to open an industry publication to read the latest round of criticism aimed at the FSA's stance on compliance. However, getting frustrated with the regulator is not going to add any value whatsoever to your business.
The first step in using compliance as a marketing tool is to adopt an attitude that sees the opportunities in compliance rather than the roadblocks and the costs. Compliance is required by law and everyone must comply. On that basis you don't have a choice and everyone is in the same boat - this is a level-playing field.
Idea one - Tell them what you do: The initial disclosure document (IDD) and the menu are compulsory and are largely prescriptive in how they must look. As you know, they are also difficult to read and understand. So why not design some additional marketing material that really helps clients understand what you do for them.
At FP Advance we call it the 'First Meeting Kit' (see right) and it is handed over at the end of the first meeting to ensure clients have some written collateral reminding them of the important parts of your service.
Providing your own First Meeting Kit allows you to position your business in the way you would like - not in a prescriptive format. If done effectively, you have turned a compulsory process into a positioning and marketing tool, just by doing a little more. This can have a major impact on the fees you can charge clients and your profitability.
Idea two - Research as a value creation tool: A key area for us is to make clients aware of our research. We tend to take for granted what we know, and the tools and technology that are at our fingertips. However, these can be highlighted to clients in a way that reinforces our expertise and gives them confidence in what we do behind the scenes.
l Investment research: Whether it be reading investment publications or research material, there is a lot of incidental work that goes on to keep up to speed with the wide variety of investment options available to your clients. The way we distil this information into concrete bespoke recommendations can be explained to clients to provide them with a greater understanding of our investment expertise. The knowledge that is required to work through all of this is far greater than most clients will ever possess.
Much of this is done by technology or, in a growing number of cases, advisers are outsourcing portfolio management (which I support). Neither of these reduces the knowledge an adviser must have. If the result that is suggested by an electronic research package seems to be unsuitable, it is only the adviser who can veto the final selection.
Explaining to clients what happens inside the technology results in a common understand of the depth of your role. This can become a hugely comforting exercise for your clients and one that reinforces your fee structure and value proposition. In fact, it may be the first time anyone has bothered to give this critical area more than a cursory explanation.
By turning a common process that is hidden from view into a story that demonstrates your professionalism, you create an opportunity to justify a premium price in the market with the flow-on affecting business profitability and future sale value.
l Legislative research: The other major research area is in relation to legislative changes and, for the sake of simplicity, I am going to lump everything together - pensions, tax and so on. In terms of providing strategic advice, legislative research is absolutely critical.
You may have gained some basic qualifications by doing an exam but, as you know, the real learning begins once the exam is finished. As you work on real-life cases for clients, your research work could consist of reading articles in industry publications, reading specific papers written on an area or literally reading the legislation itself. It may also consist of phone calls you make to technical profesionals at product providers, or attendance at seminars run on specific topics.
If this is documented or recorded in some way, it can then be used in a wide range of communications to your clients to demonstrate clearly the benefits they receive from retaining your advice via some sort of ongoing fee. Not only does a more thorough explanation of what you do in this area create confidence with clients, it is often the part they feel least able to do themselves - or are the least interested in doing themselves. Once again this simply adds greater weight to your value proposition and marketing story.
Can you see now how many of the mundane compliance issues within our businesses can be turned into positive stories and how everything to do with compliance becomes a potential story to use in building a perception of quality in the client's mind? You are going to have to do the compliance work anyway, so why not talk about it in a positive way to build value for your business and confidence with your clients?First meeting kitl About us: Telling the story of who you are as a business in half a page.
l Adviser biography: A one-page biography with a photo that can be inserted by the various advisers in your business.
l Company philosophy: The company's core beliefs regarding financial planning.
l The XYZ Financial System: An explanation of your unique (named) process.
l Review service standard: An outline of all the things you do for clients who engage with your service now and in the future.
l Client case study: A one-page case study that shows what you have done for similar clients.
l What I get for my money: An explanation of what the fees cover and the benefits this provides to clients who work with you.
l Initial disclosure document.
Source: FP Advance
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