The (not so new) trend - FP Advance

The (not so new) trend

BY brett

Man sitting on a chair, surrounded by grey light bulbs and one bright one

For most of your financial planning career you’ve fought hard to ‘bundle’ your advice to clients. 

What does ‘bundled advice’ mean? 

It means the client gets everything included for one fee; in this case the ongoing 1% of assets under management, or flat fee that you charge (whichever version you prefer).

I realise that initial advice is usually offered as a stand alone fee-based option, albeit with the belief that a very large percentage of people who take your initial advice will go on to implement, and then move to your ongoing review service. 

Financial Planning firms that are mature, not hungry for new clients, and confident in their approach, will even refuse to serve clients that don’t want the “full-box-and-dice” ongoing service.

If you’re serving the ‘at’ or ‘in-retirement’ market, it’s probably the right way to go. You know they’ll eventually use a lot of the services you provide. (See the FP Advance list of services good Financial Planners provide at the end of this article).

The New Trend

What I’m seeing in the marketplace is a move back to an unbundling of advice. That is, you can get some advice, but don’t necessarily have to become an ongoing client of the advice firm.

It feels like the next big thing and it’s not even new.

I know firms have offered stand alone and one-off technical advice at times to some clients. 

Maybe it’s been a really technical piece of advice (like a DB transfer case). Or early in your career, you offered stand alone advice because you needed cash coming in and hadn’t worked out how to get people to see the value of your ongoing service.

But what I’m seeing emerging in the market is different to either of these examples.

Planning firms that are focusing on younger client segments are deliberately unbundling their advice.


Because that’s what younger clients want.

As you know, I firmly believe there’s only one way to run a great business and that’s to be totally focused on meeting the customers needs. So, if the client wants/needs one-off advice to get started, you do it. You can work out the rest of the “how-you-make-it-pay” later.

The Challenges

While I love the idea of unbundling in the right circumstances for the right clients, I also see some challenges.

Ongoing revenue is what gives any business stability, and most Financial Planning firms have got a very solid and secure recurring revenue stream. Happy days.

Bob Veres, the US based financial journalist and all round industry legend, says that the Millennial generation “want to know what you know.” They’re not looking to just come and pay fees to get that information; they want to educate themselves

Like they do when buying any other product or service, they want to start with some online research to get some basic knowledge first.

How do you create an ongoing revenue stream if you are taking on lots of younger clients wanting to “know what you know” so they can move themselves forward successfully in life?

I know that plenty of advisers in the latter stages of their career will think, “Screw you. If you want my knowledge then pay me and become a client.”

While I can understand that as a first reaction, I believe it’s shortsighted.

The Business Model Of The Future

As I’ve said, great businesses have one focus; the client and their issues. So here’s what the successful Financial Planning firm offering might look like if you’re positioning yourself to work with the next generation of clients (I touched on the rationale for this in last week’s article: Do you have 2020 vision?

Level 1 – Free Information
The first offering might be a YouTube channel offering free educational modules on a vast array of financial topics.

Let them “know what you know” and build your brand and usefulness with your target audience.

Level 2 – Product for prospects
The next offering is a paid-for, “product-for-prospects”, as Daniel Priestley, entrepreneur and author, calls them.

This might be an online course that prospects can purchase at a relatively small financial outlay. It can go deeper than the free content.

The aim is to provide more value, in a repeatable and scalable way, and to identify which prospects from your sales funnel seem hungry for more. 

Level 3 – One-off, paid-for advice
From your communication and marketing efforts, some clients will put their hand up to access some paid-for advice.

That can be offered unbundled, to make it safe. There will be no obligation for anyone to become an ongoing client, unless they want to.

Level 4 – Membership or subscription service
The final level might be access to your services via a membership or subscription model, which could include a range of service delivery methods:

  • Advice via video conference (Zoom or Skype)
  • Face-to-face advice (in your office)
  • Online advice modules (from your existing library of free and paid-for online content)

Lots of your delivery might actually be saying “I recommend you do ‘X’ in this instance, and have you seen my two YouTube videos on ‘How to do X?’ I’ll send you the link”.

It’s the membership that provides great value for your clients and also starts you building your recurring revenue in this segment of clients.

There might even be levels of membership. For example:

Basic – gets you a financial plan and you can join a weekly webinar for free on a variety of topics. They’re recorded too, so you can access them in the membership community anytime 24/7. 

Advanced – gets you an annual review meeting once per year with an adviser. It’s priced affordably and you pay extra for any extra work and advice that comes out of that meeting.

Membership pyramid triangle

Now you’ve got pathways as your clients grow and an ability to prospect, filter and serve a larger number of clients.

Then What?

10 years down the road, you might choose to narrow your focus to those clients with money, just as the current older generation of planners have and let the newbies copy what you’ve done. 

Alternatively, you can scale what you’ve built, using technology to drive growth and profitability. The goal here is to become the killer brand. And it’s the brand building that is the most difficult part of the process, not creating the services.

The Search For ‘New’

We know that the future is not going to look like the past, and the businesses that succeed in the next decade will be searching for new and innovative ways to service their clients profitably.

I’ve mapped out a rough cut of what that might look like, but it’s only one person’s thinking. 

What do you think the future will look like?

Let me know how you go.

Financial planning list - FP Advance

Here’s a list of all the amazing services clients access when they work with a Financial Planner. I know that not all Financial Planning firms provide all of these services, but most firms provide most of these services, which is still pretty amazing don’t you think?

The List:

  • Helping clients define their life goals
  • Holding clients accountable to their life goals
  • Cashflow modelling
  • Education planning and funding
  • Investment advice (including):
    • Portfolio design
    • Portfolio management
    • Behavioural finance support
  • Tax planning
  • Budgeting
  • Debt consolidation
  • Risk management (including):
    • Life insurance
    • Income protection insurance
    • Critical illness insurance
    • Private health insurance
    • Partnership insurance
    • Key person insurance
  • Mortgage advice
  • One page financial scorecard reporting
  • Social security assistance
  • Aged care planning (for parents, or for clients)
  • Charitable giving and philanthropy
  • Business succession planning
  • Estate planning (including):
    • Wills
    • Lasting powers of attorney
    • Trusts
    • Inheritance tax planning
  • Career counselling
  • Share options planning
  • Special needs planning (including):
    • Trusts
    • Funding
    • Social security assistance
    • Care

Planning firms that are focusing on younger client segments, are deliberately unbundling their advice.

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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.