Identifying the Ideal Advice Client – Part 4…

Like all services professionals, financial advisers provide their clients with services that they can’t provide for themselves. OK, that’s a given.

To date, the majority of the financial issues that have created the demand for financial planning advice and services have been event-based.

When people have money to invest, they consider seeing  a financial planner. When people need something done with their superannuation, they consider seeing a financial planner. When people are considering insurance, they see a financial planner. Testament to the industry being seen as ‘event-based’ is the current marketplace. People are putting their ‘events’ on hold (e.g. retirement, investing, spending) until they are more confident. They are generally not flocking to the offices of financial planners (unless they want to establish a self-managed superannuation fund – another ‘event’).  

This fourth trait of identifying an ideal advice client relates to your advice firm’s ability to recognise and attract potential advice clients not based on the events in their financial lives but on the behaviours your clients have adopted as they react to the events in their financial lives.

Being legally compliant in today’s financial planning industry has created a generation of advisers and a generation of client interview habits, that are technically correct in assessing a client’s financial situation and dispensing compliant advice, but inevitably focus on treating the events in their lives rather than the behaviours. This is similar to the pharmaceutical industry that can easily (and compliantly) dispense drugs, but isn’t asking the questions to understand and manage the on-going behaviours surrounding the use (and potential need) of those drugs.

The financial planning industry as we know it today is not asking the right questions of its clients.

The fourth trait of identifying an ideal advice client is thus an understanding of the client’s behavioural complexities (whether real or perceived, whether self-created or created by external factors) that are the fundamental cause for financial advice.

Complexities could be caused by a client’s over-spending habits. Complexities could be caused by the client’s lack of time. Complexities could be caused by the client’s lack of subjectivity. Complexities could be the result of years and years (or just one experience) of bad (or no) financial advice. Complexities could be caused by a client’s elevated opinion of their own financial management ability. Complexities could be caused by years of advice from disconnected advisers. Complexities could be caused by anxiety.

The nature and types of complexities afflicting the financial lives of our clients are as numerous as the financial solutions to address them.

If however, a client does not perceive they are afflicted by a complexity, they will see little value in paying for financial advice. These people will pay to overcome and/or manage a financial event in their lives, but on-going payment for financial advice? No thanks.

And this is the financial planning industry’s watershed which it must pass if it is ever going to become an advice profession.

Today, the majority of financial advisers expect an on-going (i.e. year after year) payment stream for dispensing their product-based compliant advice. I challenge this business model will be threatened as quickly and as drastically as the print-media business model, as traditional retail goods business models.

Unless financial advisory firms can identify and attract advice clients with financial behaviours that breed real complexities in their lives, their on-going revenue streams will dry up.

What do you think?


Remember the previous four traits? Here’s the first, the second, the third.
The fifth and last is coming…


About Jim Stackpool

For nearly 30 years Jim has influenced, coached, and consulted to advisory firms across Australia. As founder of Certainty Advice Group, he leads a like-minded team of professional advisory firms seeking to create greater certainty for their clients. As an author, blogger, columnist, and keynote speaker, Jim is regularly called upon for his professional insights into the advice industry. His latest book Seeking Certainty is available now.

WordPress Image Lightbox Plugin