In it for the long haul: Building strong client relationships

Independent Financial Advisers (IFAs) are currently faced with implementing the Retail Distribution Review (RDR), which will significantly change their business models and the way that they conduct their day-to-day business.  In particular, they need to make the transition from a commission based to a fee based structure. 

While the majority are busy with the changes and making sure that they comply, many are overlooking one of the fundamental ’make or break’ challenges when it comes to the new environment – employing a team that can build long term client relationships.

In a fee based business, the firm lives and dies by the strength of its client relationships.  In crude terms, long term client = long term revenue stream.

Representing a major shift in how financial services products are sold, from a transactional to a consultancy style ‘sell’, the Retail Distribution Review calls for a considerable change in the skills deployed by IFAs.

People buy from People
There are many highly respected and skilled brokers who have always emphasised relationships with clients.  But there are many others for whom the consultancy sell is a different ball game and who will have to re-examine the sales tactics they currently use to convince a client to purchase a particular policy or plan. The consultancy model centres around a ‘softer’ sell and depends on building trust and rapport with clients over time. It requires a ‘listening’ approach and the ability to develop solutions to the unique issues raised by each client.

The fact is clients are no longer buying your products, they are buying your people.

Faced with the RDR and consumer scepticism, many firms will want to support their front-line teams and ensure that they are fully equipped with the necessary skills for the new environment.  They may be tempted to try slick sales packages that offer the ‘seven point plan’ or ‘tips and tricks’ for winning or a one-size-fits-all formula for success.  Alas, clients will see straight through such an artificial approach. Using a few choice phrases and mirroring body language simply won’t cut it and will not build long term trust.

The Golden Rule
Fortunately, it does not have to be that difficult.  Mostly we already know how to develop long term relationships that are built around the common values of trust, honesty and integrity.  These same ingredients are also key to successful long lasting business relationships.

The golden rule is ‘do as you would be done by’.  Every client is different but all want to be treated with respect, to be listened to, to have their interests and concerns taken seriously.  And of course they want to be sure that IFAs know their stuff and are accurate and up to date.   Firms that want to build a team of successful consultants naturally need to ensure that they are technically up to speed. But they also need to consider their personal development.

With training and development tailored to each individual and with support from the elder statesmen and senior managers in the business, every member of the team can find a style of consultancy that’s right for them and that ‘rings true’ with clients.  It is by understanding the value of individual potential and investing in it that the firm can help staff build long term client relationships. 

The bottom line is, to be in it for the long term with clients, you need to be in it for the long term with your team and their development.  

Jo Ouston
October 2011