The Covid-19 pandemic has highlighted the importance of relationships – not just with our own families and colleagues but also our clients.
Gathering at a virtual roundtable organised by PIMCO and Citywire as part of a series of regional events, advisers from the North of England discussed what long-term relationships mean to them, how to attract clients, the importance of intergenerational planning and the role of technology.
Building a long-term relationship with a client, according to David McKendrick, partner and chartered financial planner at Equilibrium, is like a marriage. ‘With any relationship, it’s about courting to start off with,’ he says. ‘It’s a leap of faith passing on your hard-earned wealth for somebody else to look after. It’s understanding that if you take that client on, you’re taking them on for the long term.’
First impressions count
What are the first questions an adviser should ask a new client? What needs to be established in that first meeting?
For McKendrick, it is discovering what has made them come through their door. ‘Before a client meeting, we send out a questionnaire to provoke some thoughts,’ he says. ‘Why are they there? What are they trying to achieve? What is “good” going to look like? It’s a good way of opening up those initial meetings.’
Paul Kelly, acquisitions director at Astute Private Wealth, says he focuses on ‘soft facts’ such as client priorities and goals to build rapport and confidence.
‘That leads me to hard facts. What are we actually trying to achieve for them?’ he explains. ‘I let the client know that it’s going to take quite a while for me to come up with a plan. They’ve taken years to build a pension pot up and are not expecting me to move it within the first meeting. Take everything slowly and make sure the client is comfortable before moving on.’
Being a good listener is crucial, says Olivia Bowen, partner at Castlefield. But it doesn’t come easy to many planners.
‘We all do quite a lot of talking, don’t we?’ she says. ‘I remind myself to sit back and go at the client’s pace. If you listen to people, they are more likely to feel heard.’
That includes not just learning about their hobbies and interests but also values such as whether they give to or support charity.
‘Only one in five firms regularly discuss philanthropy with their clients, so you can set yourself apart,’ Bowen says.
Agreeing with these main points was Robert Morse, senior partner at The Private Office. ‘I sometimes have to doodle a little face with two ears and one mouth, just to remind myself, because I get carried away [talking]!’ he says. ‘Picking up on what David said, one of the things I ask clients about is, what does “good” feel like? What is it we have to have done in five years for you to be in the right place?’
Setting the foundations
Once advisers get beyond the initial ‘getting to know you’ stage, they need to set the foundations of their relationship.
Kelly says the use of ongoing lifestyle cashflow reports is critical.
‘An ongoing review can help you create your “what if” scenarios at the end of each year. Obviously, it’s very difficult for us to predict what investments are going to do, but we can have a proper discussion around a live cashflow report,’ he explains.
Bowen says understanding a client’s stance on environmental, social and governance (ESG) issues can also deepen the bond.
‘You need to understand their value system,’ she says. ‘They may not yet invest ethically but most have some form of moral framework, even if it’s just around the family. We can help them think about the impact their money is having in the wider world. This leads to discussions around ESG, and if they warm to that, then it adds another layer of understanding and expertise that other advisers may not be offering.’
Indeed, according to figures last year from FE Fundinfo, 52% of IFAs do not incorporate ESG factors into their investment propositions. However, the majority expected demand from clients for these options to increase.
The personal ethics of advisers are also important. They should never forget the basics of customer service, such as promptly replying to emails, Bowen adds. ‘I’ve made a promise to myself in the last couple of years that if a client sends an email, I will get back within a day. It goes a long way to making them feel that they’re important to us as a firm,’ she says.
Advisers should also hold their hands up and take responsibility for any errors. ‘Even if it was someone else on the team, say sorry, because you are the main point of contact,’ Bowen advises. ‘You need to reassure the client that the issue is getting sorted. But don’t try and blame the team member as it doesn’t look professional.’
Morse echoes this. ‘Be very honest about what you can and can’t do in adding value. It’s about trust,’ he says.
‘We help clients think about the impact their money is having in the wider world’
Olivia Bowen, Castlefield
The young generation
Intergenerational planning can be another key foundation, but given family emotions, it is not always straightforward.
Joseph McCurdy, vice president and account manager at PIMCO, says one challenge for advisers is gauging how to make the younger generation profitable clients even though they may not currently have significant assets.
‘Younger people don’t necessarily have disposable income to put into a savings product or a pension,’ he says. ‘So understand how you can engage with them at an early age so that whenever they do inherit or get money from different sources you are in a position to advise them.’
Senior family members should also be encouraged to invite younger relatives into planning meetings, McCurdy adds, so they ‘know what’s happening with either their parents’ or grandparents’ assets’.
Building trust across the generations is important.
‘Very often, clients want the wealth to pass down the generations, but they are concerned about the ability of the other generations to cope with that,’ Morse says. ‘They are very aware of the “clogs to clogs” in three generations. Grandad made it, I’ve enhanced it, I’m not convinced that my kids are going to do anything except buy fast cars and inappropriate husbands! It’s helping them create structures that support the family going forward.’
McKendrick, also sensitive to generational differences, believes concerns can be smoothed by ensuring that money handed down is spent wisely in areas such as employer pension schemes or property.
Bowen suggests that philanthropic endeavours can help bring the younger generation on board. ‘If there is a charitable set-up, parents are often quite keen that their children, once they’re adults, start to have a say in which charities are supported,’ she says. ‘You wouldn’t necessarily have to take the children on as a client if they don’t have assets of their own, but you can get to know them in a really nice way. It can then naturally turn into a discussion about their own finances over time.’
The technological age
One big thing young people are engaged with is technology. Given the pandemic, it is something advisers also need to tune into to maintain client relationships.
Kelly estimates that 80% of its meetings are now on Zoom or Microsoft Teams but it has proven tricky for those past the age of 70. ‘The only way around it is using the telephone,’ he says. ‘But a lot of our clients have acknowledged that we need to change the way that we’ve been working in this environment.’
Morse says use of its existing app and portals, where clients can check their investments, have accelerated significantly but the biggest gain has been in back office administration.
‘There are a number of investment providers who realised that if someone’s sending you money from their bank account, they probably do exist, and the idea that you need 50 pages of wet signatures is probably the nonsense that we all knew it was,’ he says. ‘That’s the gamechanger, potentially. That people have realised that you can operate quicker and with far less administration.’
McKendrick believes that clients being able to pick up a Teams call from any location has enhanced existing relationships and created new ones.
‘It’s opened up our catchment area. We’ve got a few more people further away now and you can deal with them far more easily,’ he says. ‘We’ve done a lot of livestream events with clients such as updates on Covid. It has kept clients engaged and up to speed.’
McCurdy agrees that online interactions have accelerated but still sees a place for face-to-face meetings.
Kelly says onboarding is certainly better done in person. ‘I find it very difficult to onboard a client virtually. You can’t understand body language, you don’t get any chitchat and it’s hard to build up that rapport,’ he says. ‘For new business enquiries, we are starting on Teams, but we try to see if the client can come into the office or if we can go out and see them.’
Shouting from the rooftops
You have worked hard to engage and build client relationships either face to face or virtually. But how can you ensure that when you deliver a great financial plan or outcome that your client talks about it and helps you win new business?
Morse says that it can be ‘excruciatingly embarrassing’ and even un-British to ask clients directly for referrals. But advisers need to ignore those red faces.
‘Sometimes you just have to say, “Look, if you think I have done a good job, is there anyone else I can help?”’ he says. ‘We’ve spent a lot of time in the last 18 months really focusing on this as a firm and trying to get out the message that we want to build a business that has longevity.’
But it is not only reticent advisers – some clients also find it uncomfortable, McKendrick argues. ‘We’ve got persistent offenders who will refer on an ongoing basis, but there are some people that just won’t, and you’ve got to partly accept that,’ he says. ‘But if you ask them what they like about what you’re doing, and what you can improve on, you can lead into questions such as, “What about your friends? Are they having similar experiences?”’
The industry can also help gain new business by improving public perception of financial planning. A Royal London survey from September found that only 26% of Britons had sought financial advice.
‘The emotional wellbeing of those seeking advice improved. It was the security of knowing that somebody was looking after their affairs and that they had a financial plan,’ Bowen says. ‘It’s about getting that message across.’
Bowen has started a ‘value of advice’ document that she is looking to promote ‘far and wide’ as well as to existing clients.
Bringing new, younger blood into the industry can also help it stay relevant and appealing to the wider public.
Kelly says Astute Private Wealth launched an academy during the pandemic, helping new, young recruits and existing staff with courses at a diploma level.
Those junior members have also been busy with recording ‘educational podcasts’ looking at issues facing the younger generation.
But don’t forget the old timers just yet.
‘Everybody knows that you can go to an accountant or a lawyer and get the service that you pay for. That’s not necessarily been demonstrated over the years with financial advice,’ McCurdy says. ‘But you’re paying for the 20 years of experience that they have, the exams they have sat and what they bring to the table. Demonstrating that in a coherent way will show the value that financial advice can bring.’
