Financial advisers and wealth management firms are working in an evolving industry that is constantly responding to changes in international financial services. In order to do justice to their clients, and deliver the world-class service expected of them, they need to constantly evaluate, monitor and improve their own performance. Industry habits and norms need to be challenged.
The first thing we need to talk about is universally high standards of service delivery. These never occur by accident and are hugely important. The first step is to ensure that the bedrock of international financial advice delivery is there. And that means that all international financial advisers must be appropriately licensed and qualified to give financial advice. Qualification criteria differ between jurisdictions, but we should all agree on, and adhere to a unified and baseline standard.
The right qualifications should be introduced to the right parts of the international financial advisory business. Then, you need a strategy to bring talented employees up to spec if they are lacking qualifications. A knowledge gap analysis is useful for that as a starting point – with the aim being to close the gap.
Accreditations aren’t enough by themselves. Advisers need continual development in both technical and soft people skills. They require support in developing further in areas such as client servicing and communication. Importantly, each member of the advisory team should be assessed and treated as an individual, with their own needs, goals and motivators.
This brings us to the question of motivation. Their first responsibility should always be to their clients. This means giving them the most effective financial solutions that suit their particular goals.
The responsibility to their clients starts with fully understanding them, and their requirements. Client-risk appetites, investment profiles, and previous investing experience should all be carefully compiled into an accurate and meaningful profile. Attitude to risk assessment tools can help in this, by profiling individuals and their attitudes and preferences.
This knowledge should then be made part of an organisation-wide customer relationship management system that centralises it, unifies it and makes it available to all the experts and service professionals who will interact with a client. Thus, they can create a seamless chain from a client’s risk profile assessment through to investment matching. All International firms should be busy implementing the procedures and technology to facilitate this knowledge sharing.
As an industry, there is a need to stamp out uncertainty and lack of transparency in costs and charges. Clients need to be fully apprised of all costs and charges associated with investment options from the very start. These need to be explained clearly, and understood by the client. The discussion around cost establishes the relationship of trust between adviser and client.
Once recommendations are offered to a client, they should be formalised in a suitability report. All advice, whether oral or written, should be documented and entered and pulled through into the client relationship management system. This helps build consistency across all client communications.
Leadership and governance are important too. Companies should have in-house investment committees advising on risk and asset allocation. This would include clear policies on the use of structured notes, UCIS funds, in-house funds, non-standard assets and any on-going commission-paying investments.
At management level, it is the job of senior team members to maintain oversight over all client touchpoints. Cross-checking helps ensure that client goals and the recommended plans are in alignment. Regular reviews by team leaders and managers need to become standard industry-wide to create an extra layer of oversight, security and transparency. Again, all International firms should be implementing this practice to live up to the world-class standards their clients demand and expect from them.
Financial advisory services should never be about a one-off encounter. Once client is on-boarded, they must deliver continuous support and communications to make sure their relationship stays strong, and client goals remain on track. Regular interaction and meaningful investment reviews go a long way towards building trust and forging lasting client relationships.
Effective client servicing is only as good as the team doing it. Learning, development and upskilling opportunities for team members are essential! That’s why firms must sponsor training, learning and accreditation opportunities for all their personnel.
And finally, all firms need to embrace the always-ready, always-available ethos that comes with digitalisation. Their clients need access to them 24/7, and they should be in a position to facilitate that through technology. It should now be expected that each International firm has dedicated portals where their clients can track their investments and up to date valuations through dashboards whenever they want, from wherever they are.
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Blog published by Mike Coady