BETTE R BUSI N ESS April 2018
might find yourself doing all the talking again, leaving you open to the problems I’ve already outlined. One of the big challenges all advisers face, is the client who is very focused on a specific issue; for example how best to generate income from their investments or they might have a pension problem. In the client’s mind this is what they need help solving. However, experienced advisers know that whatever the client presents with is almost never the real issue. No one buys a pension, do they? They’re actually buying future financial security, or peace of mind, or some deeper outcome. Yet most clients don’t immediately see that. A skilled adviser will help the client identify the correct problem to be resolving, before jumping to the solution. Mostly, once the correct problem is identified, the range of solutions is pretty obvious. They may still need some technical advice and assistance to implement a solution, but it’s the first part of this process (problem identification) where all the value has been added. So how do you do it? Ask the right questions At FP Advance we use what we call Our List Of Interesting Questions, to help advisers structure first meetings with new clients in a way that allows the real issues to come out, but in a non-confrontational way.Let’s look at an example. After initial discussions the client explains they want advice on their pension arrangements. They’re not sure if they have the right plan, if the annual fees are too hefty, and if they’re invested properly. Look at these two approaches: Approach 1 Adviser: “That’s not your real problem. What you want to work out is have you got enough money so that you can live comfortably when you don’t work anymore. For that we’ll need to look at all your assets, not just your pension.
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Let’s work that out using my fantastic cashflow modelling software.” Client: “But I just want some help with my pension. I don’t want to talk about all my assets.” This adviser is solutions focused. He/she knows their onions and is dying to help the client solve their real issue. That’s to be commended. However, because they’ve jumped straight to a solution, there’s a disagreement and it can be very hard to get things back on track. Contrast that with Approach 2. Adviser: “Can I ask why you purchased these pensions in the first place? What were you hoping they would do for you? Client: “I wanted a good return.” Adviser: “And if they delivered a good return, what would that help you to do?” Client: “Well, then I’d be in a position to afford to retire at 60 with a good quality lifestyle. I just don’t enjoy my work enough to want to work beyond 60.” Adviser: “What concerns do you have about your current pension arrangements in helping you reach that objective?” Client: “The truth is, I don’t really know if I’m on track or not.” Adviser: “Have you ever worked out ‘how much is enough’? Remember, that number could be achieved using a range of your assets, not just your pension funds.”
Client: “I haven’t done that, you’re probably right; although I’m worried about my pension.” Adviser: “I hear you regarding your pension. We should definitely take a good look at it and give you some feedback on the issues you’ve raised. We can do that as part of this process. However, I also think we should be helping you work out ‘how much is enough?. If we did both of those things, you’d be in a much better position to know what the next steps are.” Client: “Yes, I would.” Adviser: “Do you have any objection to us starting with those two issues then? Client: “Not at all. That sounds great.” The second adviser understands that they need to get the client to see and understand the real issue; which is problem identification. Done well this is a hugely valuable skill. It’s helpful, it’s ethical and client focused. The aim is not to manipulate clients for a predetermined set of answers. The aim is to help people unravel their own problems with some expert help, just like my Life Coach, Kerri. The goal is to listen to the client’s answers and then help them shape a sensible, practical and hopefully simple solution to their situation. Now that’s a valuable service.
Brett is the Founder of FP Advance, the boutique consulting firm that helps financial planning professionals advise better and live better. He is recognised as one of the leading consultants to financial advisers in the UK. Professional Adviser magazine has rated him one of the Top 50 Most Influential people in UK financial services on three occasions. You can follow Brett online and via social media: Twitter: @brettdavidson Facebook: www.facebook.com/FPAdvanceLtd LinkedIn: www.linkedin.com/in/davidsonbrett Website: www.fpadvance.com
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