Jacques Coetzer, General Manager of Strategy & Transformation at SanlamConnect
The data explosion anticipated over the next three years, the hyper personalisation of products and services, as well as the ongoing imperative to target people as individuals are prompting intermediaries to reimagine their role and how they advise clients. And rightly, so.
The winds of change
Until recently, a major portion of financial advice and planning was product centric and prior to the mid-90s much time went into trying to tailor the client to the product. Then, as the late 90s and early 2000s rolled around, a raft of new regulations pushed many intermediaries into viewing clients as numbers on a chart and graph – and the world began to change.
About 7 years ago, a progressive shift happened, not just in financial services – but everywhere. Organisations began accumulating in-depth behavioural data and used it to better understand their clients. We found that you could not only use technology to improve processes, but also to engage people and provide more bespoke services. This has had profound effects on financial planning, shifting relationships from being purely transactional to becoming a trusted partners in a client’s financial journey.
Holistic financial planning and hyper-personalisation
Current research supports the assertion that the pandemic made many people rethink what is important to them. What emerged was a clear view of clients asserting themselves and their desire to be viewed as individuals with unique needs rather than members of a segment. This hyper-personalisation is the driving force behind holistic financial planning. Today’s financial plans are client-centric and must be shaped around each client’s household structure and unique needs. In other words, there is no one-size-fits-all approach.
The benefits of holistic financial planning for clients
Holistic planning views clients as a complete picture, considering current and future goals, health, family, and any other variables that may be unique to a particular person. At Sanlam, we know that holistic financial planning cannot be controlled by a checklist. Instead, it acknowledges that an individual’s life and money are intrinsically intertwined. Intermediaries looking to embrace this kind of approach and become a lifetime partner to their clients need to keep the following in mind:
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- Relationship building: Holistic financial planning requires deep relationships. Intermediaries should fully understand a client’s current situation, future opportunities and potential risks, motivations, and concerns. Most of all, they should have a sense of the client’s overall relationship with money. It is not possible to build and maintain a relationship without trust. Trust is undoubtedly the most powerful driving force behind clients’ decisions to engage with and support you.
- Clear and living goals: Through in-depth conversations, extensive research, and ongoing analysis, your relationship with your clients should centre around their goals for the present and future.
- Flexibility: Life is not static, and change is inevitable. Your client’s holistic financial plan should not be rigid and should consider the ways in which life can and does change. A holistic approach to finances and investments means that decisions are made with a client’s priorities and timelines in mind.
- Personal: Holistic financial plans are not about a product; they are about the person. As such, they should consider everything about the client’s personal and financial life; this includes their relationship with money, financial background, personal values, and wealth accumulation goals. Getting to know hundreds of clients this intimately may not be plausible, this is where technology comes in, to lighten the load.
The benefits of holistic financial planning for advisers
The benefits of holistic financial planning for intermediaries can be immense. While it may require a little extra work, it results in a far more engaged clientele that remains on the books for life. An intermediary taking a holistic approach should remember:
- Clarity: Building a good relationship with your clients, meeting regularly and clearly explaining each part of your financial plan, investment selection and how you are tracking towards their goals, is a must. Through transparency, you can prove to the client that they can trust you. Essentially, trust is the intersection at which experiences meet expectations.
- Scale: An extensive list of clients means it is simply not possible to maintain close interpersonal relationships with everyone. This is where it becomes important to lean on technology. Thanks to data analytics and software, it is possible to build client interactions into your business. Furthermore, technology now empowers clients to access some information themselves.
Looking to the future
In order to do justice to your client base, aside from ensuring trusted advice remains front and centre, you will also need to use digital tools as a force multiplier to support you in reaching and managing your clients. We may still be in the teething phases but the value that technology and the hyper-personalisation of data will bring to this industry will be immense. Holistic financial planning is just one way in which access to deep and comprehensive data allows us to create market leading value propositions that can bring meaningful change to our clientele. As we continue to improve our offering we must stay on top of the trends and forces that push our industry forward and remember that, regardless of whatever change may come, there will always be a need for the human touch.