I want to talk about the flaws in the way that a lot of businesses approach service offers and the tweaks that need to be made in order to turn them into something that is progressive and in line with the way that people expect service to be done these days.
I’ve been coaching for long enough to have seen a model just over and over and over again when it comes to service offer. I think you know it’s the platinum, gold, silver, triple A’s, B’s, C’s all that sort of stuff. It’s a model which is based on a world where people got commissions you know you went in there you ran an expense report and you split the revenue receiving clients into those who pay you a lot all the way down to those who pay you a small amount. And then you kind of created packages to kind of deliver value but pretty much underneath it all there were all the same thing with just different flavors.
The problem is we’re not in that world anymore and it fails to recognize that you know what not all clients are delegators. As a matter of fact, a small portion of the market less than 15% are delegator and that’s why our industry tends to capture such a small portion of the market. As a matter of fact the vast majority of the market are validators, people who kind of feel like they have a plan and just want to you know run it past somebody without having to give up control and self-directed people who yeah they want information and the ability make decision, by the way, it doesn’t mean just because someones are self-directed they’re not gonna grow into a delegator but you know what they’re certainly not gonna become a delegator in a financial planning world if they don’t have the opportunity to engage the way they want to engage to begin with they’ll go elsewhere.
So within our program we have a model called the progressive offer which walks through how to deconstruct you know a traditional offer and create something which is very much in line with this ascending advisory model but I don’t wanna talk about that what I want to talk about is how you make the decision to recommend a certain package to clients because it’s not a choice it’s got to be a recommendation.
There are four factors you need to take into account as to whether a client can be self-directed or potentially need some help or alternatively whether they should outsource.
The first one is time, depending on the complexity there is a time commitment that client’s need to make, monthly, quarterly, to make sure their financial planning is managed correctly. Some would say it’s four hours a month someone say it’s more but you need to understand does the client has the time to sit down and do it because they’re done potentially the outcomes that you’re working so hard to achieve are just not gonna happen this is the maintenance thing ask them whether they’re going to maintain it or allow it to fall into disrepair.
The second mean to look at is knowledge , do they have the knowledge to manage it and in particularly if you have people who have certain amounts of knowledge then this is where partnership works you can over time teach them what they need to know whilst also helping to get the result alternatively people who have high levels of knowledge you might be comfortable with themselves directing and on the flip side people who clearly don’t have the knowledge that might be an area where you want to work with them in an outsource capacity at least for the first 12 months.
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The third area is frankly interest , you know if somebody is interested in topic they’re more likely to apply it and you’re gonna need to make a call whether manager a financial planner is actually an area of interest for the client and the third area frankly is past performance, as an adviser you need to look back and make a call as to whether clients have managed that effectively in the past and whether it made smart decisions and if that’s not the case you might potentially want to work in more of an outsource capacity early on then allowing this and do it themselves regardless of how they want to look after it
The analogy I use here is you know if you are want to run a marathon you want to achieve something you have to achieve a certain level of fitness and the amount of work you need to do with a personal trainer is gonna be dependent on how fit you are, to begin with, how easy you’ve found it to do stuff in the past and a whole bunch of other stuff. Clients in the same you need to ask yourself the question do they have the time,do they have the knowledge, do they have a history of past performance and do they have an interest in the topic to keep that plan you’ve worked so hard to put into place on track and get them to the results
Service offers there’s a whole bunch complex’ to you but you can start with the idea that make them a recommendation based on those four aspects so you’re working with a client to identify what needs to be done in order to get there.