Are financial planners ready for the challenges of 2013?

16 January 2013

We know what challenges lie ahead, but how will financial advisers handle them? Zurich's Philip Kewin sets out to gauge their readiness.

We all know that ongoing market uncertainty and the implementation of the Future of Financial Advice (FOFA) reforms means we will continue to see challenges in 2013.

So when thinking about an outlook for the coming year, I’d rather not focus on what challenges lie ahead – we are all very well aware of what they are.

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Rather, I think we should focus on how advisers will equip themselves to handle these challenges and how we as providers can support them.

Delivering a complete advice proposition

The implementation of FOFA reforms provides challenges which particularly impact on the investments part of the business, which in turn puts a greater focus on risk.

While this creates an immediate opportunity for advisers to expand their revenue sources through insurance, it really should on the whole be considered best practice to provide to clients a complete advice proposition that includes a mixture of wealth accumulation and wealth protection.

The underlying success factors – what the industry will focus on in 2013  are:

  • efficiency
  • ease of doing business, and
  • customer focus.

Efficiency and getting closer to customers will be the key themes for the industry in 2013. It is one thing to have a complete advice proposition, but the ability to engage with clients and deliver the proposition efficiently and effectively will be key to the success of advisers and their practices in 2013 and beyond. 

A focus on practice management and the adoption of social media and technology will be critical components of this. 


The industry has already seen an increase in take-up of mobile devices and tablets to boost mobility and timeliness.

With providers such as IRESS announcing improved mobility, engagement tools and social elements in their software to improve client interaction and engagement, this will only continue to grow in 2013.

There will also be a need for providers to do more to achieve greater effectiveness with technology.

Social media

We continue to see a growing trend for advisers to embrace social media as a way to generate discussion and boost their profiles with clients and prospects.

The reality is, while you may not be watching this space, your clients may be watching you, so can you afford not to participate?

Stronger practice management

Research recently conducted by the Beddoes Institute on the pressure on efficiency of practices and the importance of getting support has uncovered a number of key elements of the advice journey which demand greater focus by advisers – such as adviser skills, practice service proposition, the advice process itself and the practice charging model.

This report, titled Pathways to Excellence, was released at the Association of Financial Advisers’ conference late last year and provides a ‘blueprint’ for success to help advisers hone in on what really matters to clients.

We have seen a marked increase in the take-up of third party assistance by advisers, who want executable tips on running their business.

This can take many forms, which may start with practice management benchmarking and translate into actions such as boards of advice and using consultants or client surveys. 

Stronger focus on customers

Because there is so much pressure on businesses needing to improve their proposition, efficiency and productivity, improved transparency of the adviser proposition is a must. A proposition is only as good as the client recognises it to be.

It’s amazing how many client surveys uncover a fantastic business that is let down by the adviser failing to communicate the true value and extent of what they do.

This is not just about understanding the needs of clients and demonstrating how those needs can be met through a robust advice proposition; it is also about knowing when and how to engage with clients at all ends of the advice spectrum.

We are also seeing a number of business models adopt an initial nil or limited advice website entry point for customers who are looking for insurance online. This may be a single point of time fulfilment or the first step in graduating to full advice.

Insurers getting closer to their customers

This year we introduced the Adviser Sentiment Index, and while overall advisers were optimistic about the long-term prospects for their business, they were still cautious about the short-term regulatory impact.

In the latest Beaton research we asked where advisers expected to get help around the implementation of FOFA – and one of the top sources was their insurance provider.

Providers must focus on getting closer to advisers in order to understand their business better and to enhance their role in the advice process.

With continued pressure on businesses to improve their proposition, efficiency and productivity, the support that providers can offer is becoming extremely important, and advisers will be looking to us for this support even more in 2013.

Ultimately we can help advisers get closer to their customers by getting closer to them.

Life beyond FOFA – building sustainable business

The key thing to remember in 2013 is that there will be a life beyond FOFA.

While it is an immediate deadline, the reality is that the industry needs to think more about getting “customer ready” rather than just focusing on getting “FOFA ready”.

With the right practice management, technology and overall efficiency, advisers will on the whole be able to run their businesses better – which will lead to building successful, sustainable businesses that will last in the long run.

Philip Kewin is the general manager retail, life and investments at Zurich.

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