Advisers have never had it so tough. The combination of new regulatory demands and depolarisation means many will soon find they are doing all they can to keep their head above water.
But advisers should not feel they are alone in facing this intense market change. Solid lender-adviser relationships have never been more important than they are in the current climate. In a market where advisers are having to seriously examine their business model to remain in profit and in business, more are turning to their lenders for valuable business planning advice. After all, if advisers are growing, lenders are growing too.
Lenders traditionally have not been the first port of call for advisers wanting to grow and manage their business. But market changes have meant the traditional lender-adviser relationship has been turned on its head and the reality is the industry is on the route to the buffers and without lender support, many advisers will not survive.
The industry can no longer afford to pay commission for business from which it doesn’t make money and advisers are being forced to look for new ways to make money. With further industry change imminent, it is time for advisers to be asking their lenders for support.
One option is got advisers to seek out lenders who offer a business ‘advisory’ service and can suggest ways for them to approach clients with personalised service propositions. They should also be looking for lenders who can help them focus on their business rather than having to worry about burdensome paper trails, in short, helping them become client-focused, rather than transaction-centred.
COMMISSION DOESN’T ALWAYS COUNT
In a market with ever-increasing cost pressures, advisers could be forgiven for selecting a lender based on the superficial selling point of commission. But a good lender should have a proactive sales force which helps advisers understand how to generate more income from fewer clients. The same sales force should be using their sales ability to suggest products that genuinely suit a client’s lifestyle, not those which are simply the latest fashion fad or part of the lender’s latest advertising campaign.
Service should also be a key criteria when deciding on lender relationships. Excellent service is essential to forge valuable long-term relationships between lenders and advisers. And if a client has confidence in the strength of an adviser’s after-sales service, they are likely to continue the relationship.
From a resource point of view, advisers should be aiming to get the best possible service on cases but service is about so much more than lender turnaround time. Advisers should be looking at whether their lender is able to provide marketing ideas and initiatives, and whether they are compatible with the intermediary’s values.
An adviser and lender who have common values are more likely to develop reciprocal loyalty, and together deliver a high level of customer service. In short, advisers should be looking to their lender for more business support in a changing business marketplace.Standard Life Bank is working with advisers to develop joint business plans through a service which offers each participating adviser dedicated, quality resources to help with business planning, marketing, exploiting client databases, training and sales.
As part of a further move to more closely align adviser and lender needs, Standard Life Bank has also recently completed a series of intensive three-day sessions working with specialist intermediary sales consultants, Momentab2b, which focussed on developing joint business plans and better understanding the needs of advisers and their customers. These are responsibilities that more lenders should be taking on.
While change can be frightening and many advisers might be wondering how they will survive the coming year, it is obvious tight lender-adviser relationships will be crucial to a sustainable business model. But this is not just about advisers working smarter. Lenders have a vital part to play in ensuring that more businesses focus on long term profitability rather than short- term gain. Using their lender will help advisers face the uncertainty of a changing environment with a great deal more optimism.
Contact Standard Life Bank on 0845 845 8451 to find out more about the IFA business service.IFAonline
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