Delivering what the Financial Planning Clients don’t even ask for

Many times clients don’t know what they really want. What they think they want, may not be the right thing for them. These statements are somewhat puzzling. Let me explain.

Let us first talk in terms of events that have happened. When mobile telephony was introduced, it was thought that there will not be any market for that. It was thought that there will be a tiny market for it predominantly among truck drivers, who constantly keep travelling. Today, India alone has about one billion mobile connections!

Apple launched the Iphone in 2007. Then, we had phones which were covered with buttons. Phone makers were falling over themselves to launch phones that had more fuctionality and for that they were bringing in more buttons, front & back. Iphone was launched with just one button & a touch screen. It evoked a lot of curiosity & the market for such phones exploded.

The customer did not know that such phones were good for them. The interface and the user experience was superlative. The product itself was well engineered ( like all other Apple products ).

Manufacturers then did not know that the customer would accept a phone sans buttons. They made functional products which were often clunky. I have wondered a lot of times how some of the Nokia phones of the day, ever got into mass manufacturing!

financial planning client

Steve Jobs was able to anticipate what the customer may be expecting before they even know! His products were sublime pieces of engineering… they were almost works of art.  He delivered a user experience that the customers did not know was even possible. That was his genius. He used the same philosophy while launching Ipod, Ipad, Macbook etc.

In our industry too, we can benefit greatly by taking a leaf off what Steve Jobs did. But, how many of us are anticipating what the clients may need & deliver that even before the clients ask for it?

The routine stuff of performance reports, portfolio reviews, once in a while client meetings etc. are done by most of us. The customer is also largely accustomed to this and is not expecting anything over this – atleast for the moment.

Therein lies the opportunity. There have been lots of changes in the lives of the client – the technology & social environment has changed significantly over time. The expectations from life themselves has undergone a sea change. For instance, today, there is a premium on experiencing things rather than buying & accumulating stuff. That’s precisely why travel, adventure sports, gourmet restaurants etc. are doing well. People are willing to spend serious money in these areas. The other area which has gained traction is physical & mental well being. We see more people focused on living healthy lives. People have taken to exercises/ gymming, running, aerobics, dance, martial arts, lean food etc. to stay in good shape. Hence, we see a lot of Gyms, dance studios, martial arts teaching centres etc., these days.

Life has become far more complicated. We have huge amount of stress and tension in our lives.  In view of the stressful lives we are leading, we are searching for ways to calm down the jangling nerves. Yoga, meditation, detox & destress courses, ayurveda therapies for rejuvenation etc. have become mainstream.

We don’t have time. Life has become easy and tough at the same time. It is easy because we can accomplish a lot of things with just our computers and mobile phones. We can book tickets, pay bills, pay taxes, order stuff etc. without as much as moving a single step. But the options and choices have exploded. That information overload is leading to decision paralysis, as even the thought of analysing all the information and taking a decision is daunting. Financial area has become extremely complicated. That is exactly where we come in.

We need to recognise the magnitude of changes that have happened in our client’s lives. As advisors, we need to come up with offerings to fulfil what the clients may require today. What is easy today is the transactional aspect. Even our clients can buy or sell using a platform. All manner of reports are available on tap. What is tough is the way finances themselves need to be managed. In their complicated lives, where they are already overwhelmed, they will welcome the idea of someone helping them with their finances.

Clients of course have limited expectations – for they don’t know what to expect!

They are just looking for the basics – someone who can tell them where to invest the money, help in monitoring their investments, a chat once in a while & some reports which will keep them informed as to where they stand. These are precisely what most financial intermediaries do. But, the client’s unstated requirements are much more than just these.

Ideally clients would need all these – they need someone to comprehensively examine their situation, analyse their investments, understand their goals & needs, assess the risks they are exposed to, come up with a suitable asset mix based on their specific needs and risk bearing capacity & then suggest all that they need to do. This is Financial Planning. Very few come and ask for financial planning; but once we explain about it, everyone wants it!

Clients want meaningful engagements with their advisors. They are expecting more than courtesy calls, from their advisors. This is largely lost on the intermediation community which thinks that a courtesy call from time to time and a discussion on portfolio performance is more than sufficient to engage clients. Clients don’t attach much value to courtesy calls. Nor are they thrilled at portfolio performance discussions, which often adds to their stress. Anyway, advisors are expected to take care of portfolios and their returns – right? So, why make that the centre piece of the discussions.

What can add meaning to clients would be special scheduled discussions about their plan, update on the happenings in their lives, changes in their personal/ professional lives, qualitative discussions about truly important things like their children, parents, their career etc. Seeking to know these would help the advisor to understand their client in a much deeper way. This will enhance the quality of advice & help in keeping the plan meaningfully updated. The clients also will truly value this as we are trying to find out/ understand all there is to know before we dole out advice.

There is an even more fundamental area, where the clients can be helped. Mos of our clients go through life, without really thinking about the kind of life they would be most happy about. We all have one life and living that life to the fullest should be the motto. People get that wrong and think that aggressive financial goals is what counts for a worthy life. That’s why we see many clients leveraging themselves and buying many properties, expensive cars, bring on a lavish lifestyle, world tours etc. While these may be enjoyable & may even offer a high, they come at a price. They chain the client to keep earning at a high level. They also crowd out the truly important & valuable goals in life. We have seen cases who are stressed out & want to quit, even though they seem to be doing quite well for people from the outside.

Can we advisors help there? Sure, we can.

We can help them understand what is that they truly really want to do in life, what is that which will excite them, what is the quality they would want to bring to their lives which will make their lives well lived & worth looking forward to. What will give them back the wonderful feeling of freedom, the vigour, vitality & the sense of fulfillment? Once the clients understand this, it is easy to help them financially to create a life of meaning. This is Life Planning.

Are clients going to ask for this? No. Is it valuable & useful to them? Absolutely yes!

There are many more such services – Estate planning is an important area. If advisors are able to understand the client situation and are able to advice clients professionally here, it will be a huge help. Coaching client’s children on money matters is an important area, where we can help. Helping clients through life transitions, assisting/ advising them while their children want to go abroad for studies, assisting/ advising them on emigration to third countries etc. are things advisors can do for their clients.

Clients won’t expect their advisors to do so many things for them. But, if their advisor can do all these things, they become invaluable for them. They become their CFOs, their confidants & mentors.

To get there, the advisors will have to upskill themselves. But once we get here, would our remuneration be questioned?  It’s a rhetorical question for which the answer is self evident. I don’t have to answer that!

Suresh Sadagopan

Founder  |  Ladder7 Financial Advisories