You would be hard pressed to find an IFA that didn’t have a concern about RDR. Some say large swathes of the population will go without advice as a result. They are worried that getting existing - let alone - new clients to be happy about paying fees is no mean feat. Ignorance is bliss; and the times when the fees were incorporated into commission meant that what clients didn’t know didn’t hurt them. But now it’s all out in open and many IFAs are facing difficult questions.
However, it is possible to address these questions, resulting fee-paying clients and a new happy relationship with clients. To reach this goal requires a simple process.
It begins with the first conversation; explaining the change from commission to fees. This needs to be done with confidence, rather than apologetically. More often than not the problem is in our minds, not theirs. The client is still getting value from the IFA’s advice and a happy working relationship is also in their best interest.
Although, this does not mean becoming arrogant. Financial services have become a very technical sale. Gone are the days when selling products mattered over high quality advice. If you become arrogant in your approach as highly qualified specialists, you will not be referred.
Rather, you need to engage your prospects to build trust. You need to demonstrate value by showcasing that you really understand your client’s challenges and pain. This can only be achieved by listening to your clients – to identify the real reasons why they need advice. Don’t even think about talking through products and services until you understand exactly what they need. Keep it relevant.
By listening to prospects and advising them of how you can help, you will be giving them value and earning your fees. It’s no wonder that some are arguing that RDR is actually getting rid of “free consulting,” which has been rife in industry to date. Yes, some people will choose not to work with IFAs in future. But the onus must be on demonstrating the value of using you; and thus why RDR is making the process more transparent and beneficial for the client.
IFAs up and down the country are taking advice themselves. They want to know how to retain their professionalism whilst grappling with the issue of reluctant clients. The irony is RDR is making financial services even more professional and as a consequence that includes being more professional in acquiring new business.
At Sandler Training in Oxford, we believe that if you want to expand your business in 2013, if you want to take advantage of the expected exodus of advisers thanks to RDR, you will need to address the issue of new business acquisition in this new environment. Change is always uncomfortable, but with these changes come many opportunities for those willing to take them.