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

Most Read IRIS Articles of the Week: April 24-28

Most Read IRIS Articles of the Week: April 24-28

Here’s a look at the Top 11 Most Viewed Articles of the Week on, April 24-28, 2017 

Click the headline to read the full article.  Enjoy!

1. Implementing a Robo Advisor Strategy

Robo advisors can complement—not threaten—any bank’s business model and improve customer engagement. Regardless of age, income, or gender, 75% of bank customers surveyed by KPMG said they would be likely or somewhat likely to consider a robo advice service from their bank. — Greg Vigrass

2. The Sweetspot of Sales

I’ve had some extremely interesting conversations the last few days. We’ve been discussing sales, sales management, leadership, motivation etc. I am very fortunate to have the opportunity to meet with these inspiring business leaders. One question keeps coming up: Why do you love sales so much? — Tove Zilliacus

3. New ETFs That Reinvent Fixed Income Investing—Without Reinventing the Wheel

We all know the drill: the Fed raises interest rates, and the bond market falls. That’s an important equation to consider now that the decade-long era of historically low interest rates is slowly but surely coming to an end. — Salvatore Bruno

4. Alternative Beta Strategies: Alpha/Beta Separation Comes to Hedge Funds

A quiet revolution is taking place in the alternatives world. The idea of alpha/beta separation has finally made its way from traditional to alternative investing. This development brings with it a more transparent, liquid and cost-effective approach to accessing the “alternative beta” component of hedge fund return and a new means for benchmarking hedge fund managers. — Yazann Romahi

5. Advisors Will Be Extinct in 5 Years Unless…

I’ve had financial advisors for more than 40 years. Not once in those years have I called my advisor to find out what stock/funds I should buy or sell. But I have called to find out where I should get my first mortgage, when to sell my house, or how much income I could get in retirement. — Paulette Filion and Judy Paradi

6. Outsourcing Investment Management: TPAM vs. TAMP

Many financial advisory firms want the silver bullet solution to outsourcing investment management so the focus can be on client interactions and business development. However the jargon in this outsourced space has become very confusing so here is a brief summary of our understanding. — Jennifer Goldman​​​​​​​

7. How Can Financial Planners Save You From America's #1 Killer?

You probably aren’t aware of this, but it’s true: financial planners are heroes. Yep, it's the truth. And when you think of the America's top killer, you might think about smoking, cancer or obesity. Or maybe even a serial killer. — Ronald Sier

8. How to Stay On Clients' Minds

How to effectively stay on your clients’ minds (for all the right reasons), even though they may not see you for months. — Paul Kingsman

9. 20 Reasons Why Your Company Should Do Less Better

Do Less Better practitioners are fanatical about focus and de-complexity; herein lies the secret of their success. Yet, do less better isn’t something most leaders embrace. The seemingly more attractive (and logical) option is to do more and more — John Bell

10. Advisors: Where Should You Start with Content Marketing?

Often advisors ask us, “How should I get started in marketing?” It’s a fair question. They just want to make sure they’re putting their time and resources in the right place. — Jud Mackrill​​​​​​​

11. The 11 Best Steakhouses in the World

Serious carnivores will go to the ends of the earth to seek out a perfectly marbled, expertly seared steak. And so, it seems, will we. We've visited the best butchers in France, reacquainted ourselves with the idea that everything (steaks included) is bigger in Texas, eaten at celebrated parrillas of Argentina, and enjoyed the elegant ambiance of metropolitan steakhouses. — Andrew Harper

Douglas Heikkinen
Twitter Email

IRIS Founder and Producer of Perspective—a personal look at the industry, and notables who share what they’ve learned, regretted, won, lost and what continues to ... Click for full bio