Financial Advisers: Why You Should Know Your Clients Better Than They Know Themselves

Financial Advisers: Why You Should Know Your Clients Better Than They Know Themselves

Written by: Carol Pockington

A recent visit to my bank manager highlighted the need for me to open an account with a higher % interest rate. Just one catch (as far as I could see) I couldn’t access these funds via an ATM; however if I needed to transfer money from the new account to my account attached to the ATM I could do so by downloading an App onto my cell. As explained to me, I would then be able to use this App to transfer funds from one account to another ‘even while standing in line at the ATM’.

I was somewhat skeptical to say the least and visualized lines behind me at the ATM becoming frustrated as I tried to move funds from my high interest account to my ATM account. But in reality it took no time at all; nobody was held up in a line; I transferred funds from one account to another using my cell, withdrew my cash and went on my way.

The moral of this story for financial advisers – know your clients better than they know themselves. 

Bree McDonough as part of the FSC Deloitte Future Leaders Program writes in the following article titled The Digital Revolution of Wealth Management:

Evident from changes in legislation, technology and customer expectations the traditional wealth management model is not sustainable to service today and tomorrows connected customers. The Australian wealth management industry is urged to invest in building their digital intelligence and implementing a connect customer centric business model.

It is recommended that the industry implements the strategic enablers explored in this paper to increase digital intelligence and re‐engineer their businesses around today’s connected customer:

Know your customers better than they know themselves

  1. Redefine service and value
  2. Plan for the future and remove barriers.
  3. By implementing these strategic enablers, the wealth management industry can leverage the digital revolution to build sustainable and valuable relationships, build trust and a deeper customer understanding. Successful businesses will counter disruption by constantly evaluating their business model and position themselves with a strategic advantage. The longer the industry waits to leverage the digital revolution the more difficult the challenge will become, and the more ground they risk ceding to competitors.
  4. This article raises an important issue around the need for advisers to understand their clients behaviors and how best to engage with them in a way that they are open to new ideas around managing their finances. It also presents a wider issue for consideration raised by the current digital revolution and the need for the industry to plan for meeting this challenge.

My bank manager knows I am risk averse, time poor, reasonably IT savvy but transferring funds as described while standing in a line seemed to me a step too far. Not so as it transpired.  I took this step because I trust my adviser.

So what are the takeaways for advisers from this scenario?

  1. There is power in getting to know your clients better than they know themselves
  2. Becoming a behaviorally smart adviser will enable you to get below the surface to the real issues much quicker
  3. By building a framework to communicate with clients on their terms you will increase engagement
  4. You will be able to customize the financial planning process for each client

Make it a priority to develop deeper relationships with clients to build trust. Doing so will set the stage for introducing the kinds of change needed in the financial industry to continue to win clients and stay ahead of the competition.

Hugh Massie
Behavioral Intelligence
Twitter Email

Hugh is a leader of the “behavioral management” revolution in business worldwide and bringing the field of behavioral finance to practical reality for creating and pr ... Click for full bio

The New Brand Differentiators Are Operations and Logistics

The New Brand Differentiators Are Operations and Logistics

Operations and logistics are frequently viewed as secondary functions that can be handled by someone else. But here’s the thing: With data so richly available, using it to help reinvent operations and logistics can help you stand out just as much as the next electric car or purple cow.

Just take a look at some of the world leaders in business.

Amazon, Uber, Airbnb, and other sharing sites are turning their industries around with structural and operational changes that challenge old paradigms. It’s not the products or services that stand out but the operations, logistics, and method of delivery.

For example, Amazon does not just succeed on lower prices or by offering different products than their competitors. They have revolutionized, simplified, and automated ordering, customer service, distribution, and warehousing.

The results have been staggering. It’s estimated that in 2016, they represent about 30-40% of internet retail sales and 8-10% of total retail sales.

Operations Innovation Isn’t Just For The Big Businesses

You might be thinking, “But that’s for the big businesses. How can that help my small business?”

Changing operational paradigms is for small businesses, too! Take a look at GrubHub. They are a publicly traded company, but think of whom they help: restaurants, big and small. They’ve helped thousands of restaurants expand their sales by providing seamless delivery.

Outsourcing key activities like web design, social media, cloud services, CRM, and even distribution have become both less complicated and more affordable.

No matter the size of your business, you can streamline or maximize your operations to take your sales and profits to a whole new level. The key is maximizing forecasting, inventory control, and distribution to maximize service, investment return, sales, and profitability.

Here are a few things to keep in mind:

  1. Many operations experts say that 80% of sales are with 20% of your products. It’s often true, yet suppliers continue to proliferate styles, colors, sizes, models, and features to presumably serve more customers and provide more features. By keeping it simple, you help yourself and your customers.
  2. Pursue profit and not volume. Businesses frequently fail by adding too many stores, products, and marketing. In contrast, focusing on competitiveness, bestsellers, reducing costs, and reducing structure can have huge payoffs.
  3. Conduct a simple “SWOT” analysis (Strengths, Weaknesses, Opportunities, and Threats) to get a perspective on your business. The surprising aspect of this exercise is that we frequently take our strengths and opportunities for granted rather than maximizing them. For example, approaching key and repeat customers usually presents the greatest opportunity, lowest cost, and most profitable source of additional sales.
  4. Encourage testing new ideas and scrapping ones that don’t work. You will make mistakes. Focus on solving them rather than blaming someone. Consider using the process of develop, test, measure, and adapt. The measure step is, by the way, the most frequently forgotten.

It’s easy to get seduced by design, marketing, or the next flashy idea. Plenty of businesses innovate in these areas. Don’t forget, though, that just as frequently, success comes from innovation in operation and logistics.

Dr. Bert Shlensky
Twitter Email

Bert has over 30 years of experience as a results-driven executive leader.  Over the past six years he initiated five startup businesses--each of which achieved sales wit ... Click for full bio