Weekend Digest for Financial Planners/Advisers/Paraplanners (11th & 12th Mayl)

Welcome to this edition of the Weekend Digest. Perhaps the most important piece of industry news this week is the realisation by advisers that someone’s been scheming how best to take away their bread and butter, right under your nose.  Turns out, certain providers – AEGON and Standard Life – are planning to turn off trail commission on pre-RDR business, where the client has been ‘inactive’ for 3 years (AEGON) or carries out certain non-advised transactions on their own account (SL) 

It’s perfectly acceptable for a boss of a lifeco  to call out journalists and accuse industry publications of ‘sloppy journalism’ when they printed the story (and got details wrong.) But when he/she goes as far as threatening openly (in the comment section of the article) to pull the company’s adverts with the paper, then you know things are really going to get messy. 

So if anyone out there sitting on a large book of legacy business, on platform or off platform, is waiting until 2015/16 before they act, the handwriting on the wall is; there’ll be nothing left in 2016!


‘Bundled’ Vs. ‘Unbundled’ Platform Propositions — But Not As We Know It

The terms ‘Bundled’ and ‘Unbundled’ now have a new meaning in platformland. In the pre-RDR world, it meant that fund manager and the platform got paid via a single AMC charged to the clients. However, in the post –RDR terrain, this now means client makes a single payment which covers both the adviser and the platform fees.

Apparently, preferential treatment is the future. It seems to me that if you have a big uncle,  aka network or service provider, they will strike a deal with the platform to have the cost discounted. If you don’t i.e.  you are a small directly authorised firm, then you are on your own.  And one more thing, can we expect to see small IFA firms forming some sorts of alliance, so they have some clout to strike a deal with platforms? We”ll see.


Forget Features and Benefits: Tell Clients Stories They Can Retell

This article by Consultant Stephen Wershing , author of Stop Asking for Referrals is about the best way to get clients to refer their family and friends. He pointed out that if you deliver great services to clients, they will naturally tell others about you but that’s not enough to make those people pick up the phone and call.

This is because people aren’t wired to remember facts, features and benefits. The answer, according to Wershing, is to tell compelling stories of how you solved other clients’ problems. Wershing wrote; “People don’t remember facts and features and benefits. People remember stories about people. They probably won’t remember your positioning statement or value proposition. They may remember a story about how you solved that same problem for another client…. Stories move people. We are wired to respond to them. You have seen this point made in articles and books aimed at financial advisors. But there is another reason to tell stories – because clients are more likely to remember them and be able to repeat them to others.”


High Net worth Clients Expect Lower Adviser Fees As %FUM, Right? Wrong!

This article in the FA Magazine by Karen Demasters is based on findings about how HNW respond to adviser fees (in the US but likely to be very relevant in the UK.)  The key finding is that HNW clients (defined as those with $2M or more FuM) don’t necessarily expect to pay lowers fees, as a percentage of fund under managements. According to research by PriceMatrix, 29% of NHW households pay 1% or more in adviser fees.

These investors are looking for fair fees, not necessarily the lowest. But what is fair? Is it fair that client with higher FuM pay the same rate as those with lowers? I think ‘fair’ is value. Value is fair.

The report also finds that advisers retaining lower value clients with the expectation that these client might become higher value are also likely to be disappointed.  Such occurrences are too uncommon to merit an adviser’s attention and resources.” According to the research, only 7 percent of clients started with less than $1 million and grew to more than $2 million, and only 3 percent began with less than $500,000 in assets.



Will Writing A Book Bring A Flood of New Clients?

This interesting article in Reuters by Chelsea Emery looks at cost and benefits of writing a book, as a financial planner.

The ‘author’ in ‘authority’ is there for a good reason. A book is a great way to establish credibility but the economics isn’t very good. It costs thousands of pounds in to pay editors, marketing professionals and ghost writers. However, with several self-publishing platforms online, it’s never been easier or cheaper. My guess though is financial planners who want to write would like to do so in hard-copy  Somehow, this is perceived to be more ‘credible.’

In the end, the motive for writing a book really matters. A book on financial planning isn’t likely to be a best seller but in the long run does a great deal for the adviser’s profile and credibility.


10 Reasons Your Best Talent Will Leave You

 If you run a financial planning business (or any kind of business for that matter), you want to read this article in Forbes Mike Myatt about why companies fail at retaining great talent. Apparently, more than 40% employees don’t respect the person they report to and more than 60% don’t feel their career goals are aligned with the plans their employers have for them. But wait for the shocker: over 70% don’t feel appreciated or valued by their employer!

Myatt went on to highlight 10 reasons why good employees leave. This is mostly down to the employer failing to unleash their employee’s passion, develop their skills and recognise their contribution.


 I hope you have enjoyed this and hopefully it’ll make you job a little easier! As usual, thoughts and comments are welcome. Enjoy your weekend!









Abraham Okusanya
Abraham is the founder of FinalytiQ, a research consultancy for platforms, asset managers, and advisory firms. Recognised as one of the country’s leading experts in retirement income, platforms and investment propositions, Abraham has authored several papers on these subjects and delivered talks to the Personal Finance Society, The FCA and several conferences across the country.

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