Communicating your value to clients within an hour of meeting them is taking on fresh significance with the move to fee-based advice, industry figures say.
Chris Cummings, director general of the Association of IFAs (AIFA), says advisers are "getting better" at what he calls the ‘ice-breaker' meeting, but others say they may be losing business as a result of their inability to articulate their worth.
"This is an area of weakness, even with some very good advisers," Brett Davidson, chief executive of FP Advance says.
A survey conducted by Professional Adviser suggests the vast majority of advisers (88%) consider the initial client meeting to be "extremely important", while 73% say they believe they are skilled at communicating their value to customers.
Paul Willans, CEO of Mazars Financial Planning, says the effective banning of commission arrangements will bring to an end clients' perception of "free" advice, meaning it is more important than ever for advisers to be able to demonstrate their value.
"Once upon a time, advisers did not seek a contractual relationship with the client," he says. "Primarily they sought to get approval to go ahead with the advice and that is what their income was reliant on.
"With fees the relationship is contractual and therefore it is vital clients understand advisers' value. Very few people will commit to a fee if they can not see value in it."
Brett Davidson says the key to the first meeting is to "demonstrate capability" so the client can "tick the mental box: ‘I have come to the right place'".
"In the first client meeting, you have about an hour or so to really connect with the client. This is the most important bit and requires strong questioning skills and a few power questions that always do the trick, even with difficult clients."
Davidson is referring to the ‘power' questions relayed by world-renowned life planners such as Bill Bachrach, who swears by "What is important about money to you?" as his opening question.
Andy Jervis, director of Chesterton House Financial Services, says advisers run scared from asking essential "emotional" questions and so fail to capitalise on their first meetings with clients.
"A lot of advisers shy away from emotional responses", he says. "Get them [clients] involved with their desires so they can see a link between their life and financial planning. If they don't see what is important about a pension they won't want one."
The first step, Jervis says, is for advisers to have a clear idea themselves: "When I have asked advisers what it is they do for their clients, many struggle to answer," he adds.
The Financial Gurus' Power Questions
"Mr or Mrs Client, what is important about money to you?" - Bill Bachrach
"If I were sitting here three years from today, looking back on today, what would have to have happened in that time for me to be happy with my progress?" - Dan Sullivan and Catherine Nomura
"You have all the money in the world and only 10 years to live, but in good health, what would you do?" - George Kinder
"You have all the money in the world and just 24 hours to live, what would you do? - George Kinder
£500,000 annual fee income
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