By Henry Van Deventer – Chief Specialist: Advice Model Design: Liberty
We all know that financial advice is about trust. For many advisers, trust is built upon building close relationships with clients, usually in face-to-face settings where an atmosphere of openness is established. To have discussions about a client’s money – and bringing about meaningful change to their finances – a level of engagement is needed to allow an FA to become a coach, manager and even a psychological councillor.
Throughout 2020, we’ve had an opportunity to re-examine how these relationships are formed, and we were relieved to see that while there were some teething issues at first, many clients have been open to developing these relationships online.
Talking about money, your own or that of others never fails to be an engaging subject. In the case of one’s own numbers, physical meetings with FAs reinforce the atmosphere of confidentiality. This is necessary since the bank balance represents an absolute truth of an individual’s material worth. However, we’ve noticed that once a client realizes that it’s safe to use online forums to discuss their finances, they still open up and relationships can be built.
Before the COVID pandemic, this sort of thing was rare, but with changes in the working environment taking place, FAs have been asking themselves how they can extend the value of their relationships online.
Time and accessibility
On one level online meetings save a great deal of time. Studies have shown that once clients become comfortable with their adviser relationship having a virtual dimension, the vast majority are satisfied with this medium for certain future engagements.
Along with precious time is the issue of accessibility. An online Adviser can be requested for discussion much faster than they would in the physical world of traffic jams and over-running meetings. Therefore, many have woken up to the fact that FAs can in many instances be engaged just as successfully on a virtual platform as they can in person.
What clients really want
Liberty’s research shows clients do not lie awake at night worrying about the performance of their funds. They worry about the impact of real-life events. Having another child, where to educate your children, the holidays you go on, whether you can afford to eat out once you’ve retired. These are the sorts of questions genuinely worry people. The more adept our Financial Advisers become at speaking to these issues, the more valuable their advice becomes.
With the advent of internet-based financial services, people are now in a position where they can buy almost any financial product themselves in the digital marketplace. Although this is convenient, choosing appropriate products can be difficult without help.
There has been a shift away from planning for specific events such as retirement, paying for education or losing your ability to look after your family’s financial needs. This has now pivoted towards planning for sustainable lifestyles, known as financial life planning. With the evolution of financial planning software, it is now possible for FAs to help their clients understand the long-term consequences of their decisions so that they choose a standard of living they cannot afford to maintain.
Offering real value online
Given the magnitude of most financial decisions, achieving open and productive discussions online is becoming more achievable as we become attuned to virtual meetings.
Clients are showing a preference for using internet-based meeting solutions like Zoom, Skype or Microsoft Teams to have in-depth conversations and receive financial advice that makes sense to them. So far, these medium’s appear to be trusted conduits for confidential discussions.
This means that the advice technology used by Financial Advisers needs to provide a clear, powerful and meaningful virtual experience. The development of this solution for Liberty is on the cusp of completion and will be piloted with our Advisers in the final quarter of 2020, with a view to a broader launch early in 2021.
These technologies are just another way for our FAs to remain close to their clients, being there when they need them the most to make a real difference to their lives. As long as this advice has meaning and can provide a measurable and memorable impact on the life of a client, the medium doesn’t matter.
This article does not constitute tax, legal, financial, regulatory, accounting, technical or other advice. The material has been created for information purpose only and does not contain any personal recommendations. While every care has been taken in preparing this material, no member of Liberty gives any representation, warranty or undertaking and accepts no responsibility or liability as to the accuracy, or completeness, of the information, presented. Liberty Group Limited is licensed Insurer and an Authorised Financial Services Provider (no 2409).