Financial planners need to develop social as well as business relationships if they hope to win affluent clients, Oechsli Institute president Matt Oechsli told delegates to Discovery’s Financial Planning Summit on Thursday in Sandton. His institute researches both affluent clients and financial planners and offers coaching for financial planners.
Oechsli described four types of advisors: veterans who refused to change and were losing clients; advisors who recognised the need for new clients, but kept doing business in the same way expecting different results; those he termed “segment three” who had high expertise and skills, understood the impact of major societal shifts but who failed to win affluent clients; and those elite advisors who were able to change their practice in order to remain relevant to their clients, and who were bringing in more clients than they had previously.
Advisors in segment three were making a fundamental mistake. “We all know people who talk too much, and what are they talking about? They’re talking about themselves. They repel,” Oechsli warned. Excellent social and sales skills would help them to take their business to the next level.
Elite advisors were able to bring in business from affluent clients, and faced little competition in doing so, because they were able to maintain strong relationships with existing clients. Most of their new business came from personal introductions by existing clients.
Affluent clients detested both taxes and sales people, particularly in the auto and financial sectors, so advisors had to ensure they built strong relationships with their clients. “Getting social with clients increases business,” he said. “If you just do good business, you’re a good professional, but if you haven’t developed a personal relationship, you’re not going to get the business.”
Being a good professional “is a hygiene factor, not a value proposition”, he said. If advisors had strong business skills but weak social skills, they were at the risk of losing clients, because trust is so fragile.
“In a social setting, when someone asks you what you do for a living, half of them aren’t listening. It’s an opportunity to develop rapport, not to pitch for business. The more listening you do, the more opportunity you have, because it’s all about them.”
While 71% of advisors claimed they had both a business and a social relationship with their clients, only 29% of affluent clients said they do. Just over half of affluents thought their advisor knew their children’s names, but only 10% thought the advisor knew their pet’s names. Over 40% said their advisors knew their charitable interests, but 40% felt their advisor thought about them quarterly or less. A total of 61% thought their advisor personally cared for them, but just nine percent had been invited to the advisor’s home for dinner.
Advisors looking to woo affluents should offer “Ritz-Carlton” service in the office, with total recall of the client’s life events and passions, custom labelled parking spaces, active listening, engaging both spouses, preferred beverages, and personal staff greetings. Once out of the office, they could offer non-business lunches, dinner with spouses and intimate client events such as wine tastings or barbeques. They should surprise and delight clients with unexpected presents, visit them at home or stop by for coffee, give personal cards and handwritten notes, and connect on social media.
“None of this is complex, but we have to systematise it,” said Oechsli, who recommended that advisors stay away from business talk during social events to focus on building rapport. Being introduced by an existing client was already a strong endorsement of an advisor’s professional skills.
“Elite advisors are those who are doing what general populace won’t do. You can take business away from many people if you dare. You can strengthen relationships and simultaneously go after others’ clients,” said Oechsli.