Two to tango: Advisers and clients need to play their part

Two to tango: Advisers and clients need to play their part

Advisers know the moves that will lead people to their financial goals but clients need to come to the party.

The key is to start with small steps.

No one starts selling out performances before they’ve set foot on a dance floor.

Similarly, no one achieves a comfortable self-funded retirement without incrementally and diligently saving over many years.   

But trying something new can be confronting. Understanding that and introducing change gradually establishes trust with clients.

Interactive technology-based tools and techniques can be an effective way to educate clients and encourage them develop healthy financial habits.

It’s more engaging if you can show them, not just tell them, and engagement is everything.

As much as 30 per cent of an adviser’s client base is disengaged, according to practice management consultancy Astute Wheel. Reducing that number can transform your business.

Keep showing up

A personal trainer will tell you that physical fitness needs core strength. It’s the same with financial fitness. The core of the advice relationship is a strong partnership built on trust, empowerment and shared accountability.

Financial fitness takes personal responsibility. That’s something clients can’t outsource.

Putting their financial house in order needs clients to do more than just show up and pay the bills. Active participation and ongoing effort are essential to achieve their long-term goals.

The industry-wide shift towards holistic, personal advice recognises that.

Building a sustainable business comes from providing strategic advice and delivering genuine value. That includes offering a wide range of services that meet the differing needs of each stage of the financial life cycle.

However, it’s not only what you do but how you do it that counts.

Bringing advice to life translates clients’ intangible goals into a future they can envisage clearly. Ongoing coaching aligns behaviour with goals, helping them make informed choices and building healthy habits through practice.

Avoid treading on toes

The goals of advisers and their clients are inextricably interlinked but very different.

Both parties need to clearly understand their respective responsibilities.

Clients are responsible for how much they earn, how much they spend, what they buy and ultimately the gap between where they end up and where they wanted to be.

Advisers are responsible for providing the framework that clients use to manage their earnings, spending and savings. That starts with drawing out clients’ goals and then setting a robust and realistic plan to meet them. Advisers educate and coach clients to help them get there. They implement the plan and manage its effectiveness over time.

Together, advisers and clients monitor the progress towards achieving the agreed goals.

Clearly defined roles help both parties to assess each other’s performance and whether the plan is working as intended.

It’s not a solo performance

Advisers can teach clients the steps to financial freedom, but if clients aren’t committed to the routine, it can quickly come undone.

It’s easy to think that if an individual seeks out a financial adviser, they’re determined to improve their financial wellbeing but desire and dedication don’t always go hand in hand.

Furthermore, goals and circumstances change over time, and financial plans need to be refined to reflect that. If a plan isn’t realistic, even the keenest client will find it tough sticking to it.

Ultimately – and literally – the buck stops with the client. No amount of coaching will force an unmotivated or ill-disciplined client to change. And that’s when a tough call often needs to be made. If the client isn’t any closer to their plan despite your best efforts, advisers still share accountability by collecting fees for advice.

A strong partnership between advisers and clients, on the other hand, delivers a shared sense of achievement and rewards on both sides. That’s something to have you both dancing for joy.

Peter Malekas is Managing Director of Moneysoft.
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