Now That I've Found You, I'm Never Letting You Go! - FP Advance

Now That I've Found You, I'm Never Letting You Go!

BY brett

If all the value in your clients is embedded in the lifetime relationship (and in my view, it is) then the most important thing to do once you get them, is to keep them – forever.

In the old financial services world, this was a lot easier than it is today. Many financial products paid ongoing trailing commission regardless of whether or not you provided any real ongoing service, as many clients didn’t understand what they were paying for once the initial advice was given. Even if a client did decide they wanted to stop the trail commission payment, it was next to impossible to get turned off. Sure, they could move to another adviser who gave a better service, but it was extremely difficult to call a product provider and say stop the trailing commission. So it didn’t happen.

Now That I've Found You

 A Whole New World

In the UK, adviser ongoing revenue can now be turned off by the client. It seems to have only just dawned on some advisers and firms that this is the biggest threat to their business going forward.

I believe most advisers accept that clients will pay fees if they offer something of value, but the big question is: “will they keep paying?” 

For many this will become a greater and greater problem as more new business falls under the new regime, and even legacy business will eventually be caught up in the new rules, putting existing revenues under threat.

A similar change has been brought into the Australian market (yes, the regulators talk to each other) whereby advisers effectively have to re-sign the client to an ongoing service agreement every 2 years if they want to keep getting paid.

It is possible that the adviser relationship will withstand this threat as it has many other threats in the past. The annual review meeting is perceived as pretty high value but the content of the meeting can leave the client feeling like they’ve had a cup of tea and a chat. Are clients willing to pay £1,000, £2,000 or even £10,000 per year for a cup of tea and a chat?

When clients see their 0.5% – 1% of AUM charge converted into pounds, this might well be the question they are asking themselves. With some gentle and loving support from the media they may well be egged-on to cancel their adviser’s ongoing revenue. This won’t start with a call to the adviser, it will be straight to the provider who administers the revenue, making it very difficult and time consuming to rescue the relationship and the fee (if it can be rescued at all).

If this scenario does play out we may see those remaining businesses starting to polarise into high value and low value advisory businesses (and I’ll be discussing more about that next week).

Now is the time to ensure you know who you work for (your clients), what they want (their top 5 issues) and whether or not your proposition meets their needs.

Where Do You Stand?

  • Do you know the top 5 issues your clients need help with? (Ask this question for each client segment that you work with.)
  • Does your client proposition address these issues? For example, do you use a cashflow model to show people their situation visually?
  • Does your marketing material tell your clients that you know their issues, and can help to resolve them?
  • What do you talk about at client review meetings? Are you too investment focused? If so, could you change the focus to understanding their deeper lifestyle issues?


Let me know how you get on with the above questions by leaving a comment below.


My upcoming webinar Converting Existing Clients To Your New Approach is on Thursday 7th November 2013 at 12pm. Making the move to an ‘outcomes focused’ financial planning service is highest value for you and your clients, but there is some work involved. If you can create an amazing ongoing review service (see last month’s webinar), you are just about there.

This month we look at the steps you can take to convert existing clients to your new offer successfully.

Last month’s webinar An Amazing Client Review Service can be heard here. Research from across the globe tells us that clients really value a great ongoing service from their adviser. The same research says that what is currently delivered by most advisers is pretty bad. Find out how to create a simple yet amazing review service for your clients and watch your profits soar.

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By Brett Davidson

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ABOUT BRETT DAVIDSON When you work with FP Advance you work with me, Brett Davidson, directly. My motto is ‘advise better, live better’ and I practice what I preach. I’m straight talking and get to the heart of an issue quickly. There’s no beating about the bush, just a focus on helping things improve. Ask my clients – what I teach works.