Financial advice is after all about planning; maybe we should all be called financial planners. Your interaction with the client is what sets you apart from other methods of distribution, and that interaction is based on trust. So it is vital that you make the most of that interaction and don’t begin to act like a comparison website.
A plan has to have objectives, let’s call it a ‘Goal’. Agreeing and getting the client to describe in detail their most important Goal is for my money the greatest service you can provide. Computers find it hard to have that sort of interaction, even when clients increasingly trust them. Computers find it easy to compare things such as price and features. Thus computers, or people on phones emulating a computer transact almost 100% of car insurance.
The trend we have observed has been away from Goal setting, towards comparing and switching, which is the wrong outcome for the client and financial advisers wanting to have a valuable future. The primary need in the market is for Goal setting, i.e. putting together a financial plan that they will work together over a number of years to achieve, not just comparing existing assets.
Setting a Goal is key because in almost every case, the current assets available, growing at standard capital market rates, will not be enough. So pretty pointless just switching in that case – the Goal will still be missed. In lots of scenarios that’s exactly what has happened. The adviser does not extract a Goal from the client, simply tries to show that by switching one platform to the other the client will be better off.
We all know that no-one knows whether the client will be better off for certain, we are simply trading one discrete set of charges against another. The new funds may underperform, the new platform may increase charges, the product wrapper (and provider) may become extinct. It also leads the client into a false hope scenario, they may think everything is OK.
But, as we can see from every single bit of data, the savings gap (the gap between what they have and what they need to retire) has been growing (accounting for recessions also) and now we are seeing the beginning of an advice gap.
The antidote to that scenario and the answer to easy compliance is ensuring that the client is making any change (a switch, or even an agreement to pay more whenever they can) with the purpose of hitting their Goal.
Therefore what True Potential has been doing since the start of our Platform, is providing the tools and funds to support Goal-based investing.
The software will quantify shortfalls, will build in inflation and will provide a graphic, daily reminder to you and your clients as to how they are doing. The gap between the line towards a Goal, and the current value of the investment being employed to hit that goal is obvious. Closing that gap is all that is required.
Our belief is that clients (and us) get into debt on impulse. We see something, and in most cases we decide to buy it, have it, there and then. We get instant gratification, with an instant increase in debt.
ImpulseSave® is designed to not only make it as easy (in terms of physical effort) to put money into savings as into debt, but also to tie in with the Goals you have agreed with your clients.
Each client site has the ability to show their Goal, as long as you have set it. Please, please take the time to really examine how to do these things – the next time you meet any client, or any prospect, ensure you ask them about what they are saving for, what is the most important thing for them to achieve. Quantify it in today’s money, and then agree to use whatever resources available to reach that Goal.
ImpulseSave® will quantify the gap between the Goal and the investment and with one click the client can catch up, or at least put money that would have been used for fleeting pleasure (in London one coffee and a cake) and top up with £10 or an amount they feel is right. You can set up an agreement with them as to how much you will charge for that service.
We are confident that ImpulseSave® has the power to revolutionise the industry and your business and we are proud to be able to offer this to you, if you want to join us.
In this youtube clip I actually topped my own ISA up LIVE by £500 in 40 seconds! See for yourself.