I think that it is time to re-think what advisers think they know about their customers.
Insurance is sold, it isn’t bought, right?
People don’t value advice, right?
If you haven’t had a look at the excellent “World Insurance Report 2016” by Capgemini then you should, as it will probably make you re-think a few industry assumptions.
“Our Voice of the Customer Survey found that customers are most interested in having insurers advise them of impending risks, and are willing to pay for such services (see Figure 2.7). Next to risk mitigation, customers are most interested in getting discounts, such as shopping vouchers, based on data they share, while wealth management services fall lower in the order of preference.”
Perhaps the reason this particular point in the report resonates with me is because I know from personal experience – both as an adviser and a coach working with advisers – that clients WILL pay for risk mitigation advice. Much of the magic that financial planners believe they weave is not especially valued by consumers either.
It never has been really.
And consumers have never much cared for insurance products either by the way.
Far too many financial advisers (of all specialist areas) fall into the trap of believing that the product or the process is valuable to the consumer when in reality these things are incidental as far as most consumers are concerned. They are a “means to an end” – no more and no less most of the time.
As a professional who lives only by selling advice (as I have no “products”) I know for a certainty that people will pay for advice. I know for a certainty that people place a value upon sound advice that helps them achieve the outcome that they desire. They will pay more if it gets them the outcome they desire more quickly, more conveniently or at a lower cost than they believed might otherwise be involved. In other words they will share the value that can be created through good advice with the adviser providing it.
The focus for the adviser therefore must be upon understanding what it is that clients truly value and desire. Therein lies the opportunity which can be realised in the form of fees-for-expertise or project management fees.
Look beyond the standard fact-finding questionnaires and compliant advice processes and really find out what clients want to achieve. It definitely takes longer to find out of course than gathering demographic and financial details, however it is the key to unlocking greater value and stronger professional positioning.
Do it with your top dozen or so clients to begin with: spend the time with them that is necessary to find out what it is that they value. Then spend a bit more time figuring out how your expertise can help deliver the outcome for them. Then put a plan to them, with a value-based cost….
Re-think what you think you know about your clients and get onboard with what they value most, and you will find significant new opportunities in the year ahead to be valued well for what you do best:
Giving Great Advice.
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