COMPETITION for clients is heating up among financial planning firms, particularly the small to medium boutique firms, but there are some serious service gaps in the product offering of most planners.
We all know that to gather clients — and keep them — they must be properly serviced. I have spent many years in the financial services arena and know that financial advisers understand this, but there are some emerging gaps. Most of these gaps can be attributed to a serious lag in adopting new technology.
Analysis of financial planning service offerings and web sites shows an industry slipping behind in online service delivery, yet even the smallest firm can provide technology-based information and service for clients that is equal to the biggest players and isn’t expensive.
A glaring example of service gaps is financial planning web sites and the services offered around them. Too many sites are just ‘brochure ware’ that describe the adviser’s capabilities and contact details, but give customers little reason to come back.
Investors now want to analyse market information for themselves and have greater control over their portfolios. Because financial planning web sites do not generally provide these services, clients have to go elsewhere — to places that are geared to capturing these investors as customers.
What about investors who want to manage a small investment portfolio of their own? A financial planning firm cannot expect to compete long term if their response remains ‘Oh, I’ll phone your trading request through’. This is old fashioned, poor service and will put your client at risk. Why send them somewhere else?
The alternative is to offer market information and trading via your own web site, matching it with the big end of town. This trading could be initiated either by an adviser or by your client.
Don’t fight clients’ wishes. Help them do what they want to do, provide them with information and functionality, and they will remain loyal to your practice.
The key to understanding ‘service gaps’ is to honestly assess what clients might expect, rather than a firm being preoccupied with its own view.
We are becoming used to a broad range of efficient services from our suppliers. Financial advice is just another service, a vital one, sure, but it still needs to compete like other services. Financial planners need to embrace this reality.
Some planners are concerned about boundaries, yet this too is slightly old fashioned. There need not be any boundaries: planners can deliver services across the spectrum and leave clients to choose the extent of service they use.
Filling these service gaps is now inexpensive and simple. Even the smallest financial planning firm can establish an online presence that matches the largest financial service providers, by giving clients access to market information, trading solutions and breaking news through their web site.
Many clients already subscribe to these services on top of paying their financial planner’s fees, and the danger for planners is that clients often receive these services through potential competitors.
Service gaps represent, at a minimum, opportunity lost. Eventually, they may erode a client base. If your concern is the holistic financial and lifestyle success of your clients, then why not provide for the best and the latest via your web site?
Closing the gap benefits both a financial planning business and its clients. A flexible, comprehensive service platform strengthens a business by allowing it to provide and charge more. Clients enjoy the ease of delivery and retain their loyalty to you, because they won’t look elsewhere if you give them what they want.
Alun Stevens is chief executive officer of Bourse Data, a leading independent provider of investment market information, financial website services and trading tools.
