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Developing your advice business

Providing long-term value for your clients in a fast-changing world

At the recent Humans Under Management conference hosted in Cape Town, industry experts covered a range of topics, with a broad theme of how financial advisers can remain relevant and add long-term value to clients in a fast-changing world. Tebogo Marite, investment writer at Allan Gray, provides an overview.

From the cost-of-living crisis to climate change and artificial intelligence (AI), investors have a lot of information to grapple with. In their quest to make sense of these challenges, they are naturally turning to the internet and social media for answers. The increased amount of financial information available online, and AI’s ability to synthesise it, is creating a preference for ‘’do it yourself’’ money management over paid-for financial advice with a longer lead time.

While there are plenty of positives in investors taking an active interest in their finances, financial advisers play a crucial role in helping investors avoid behavioural traps and navigate the sea of self-curated online information.

Here are two ideas to consider when supporting your clients in the current environment:

Go beyond problem-solving

Many investors seek financial advice at or after a major life event, or to help solve a specific financial problem. While advisers thrive as problem-solvers, many report that check-in meetings get less interesting as the problems are solved. This juncture can either lead to the gradual dilution of the client-adviser relationship, or it can further entrench your value in your client’s life.

According to Dr Meghaan Lurtz, wealth management writer, researcher and conference speaker, the client-adviser relationship goes through two phases: fix, which is identifiable by a clear problem to solve or transition to manage, and fine, which is usually when there are no immediate problems to fix. It is at this stage that disengagement can occur. To avoid this situation, Dr Lurtz suggests introducing a third stage called ‘’flourishing’’.

The goal in the flourishing phase is to help your clients identify areas of growth and meaning that are beyond what they thought was possible before. Using the principles of positive psychology (the scientific study of the factors that enable individuals and communities to flourish), Lurtz recommends covering four categories of questions in your ‘’flourish’’ interactions:

  1. Purpose, autonomy, self-determination and optimism
    Apply an introspective lens to the questions and help the client consider their life's purpose in relation to their finances.
  2. Personal growth, engagement and meaning
    Look at how the client’s overall level of life satisfaction could be enhanced if there were fewer financial constraints.
  3. Vitality, resilience and self-acceptance
    Explore opportunities for physical and mental health enhancement in the client’s life that finances can enable.
  4. Positive relationships
    Examine ways that the client can use their finances to improve or strengthen their relationships or cultivate meaning through charitable or professional connections.

Through this line of questioning, you become the person who helps your client strive for fresh ambitions and carve out a place for yourself in their journey going forward.

Optimise your human ability to connect

To implement some of Dr Lurtz’s thinking you will need to tap into the core motivations that drive your clients’ behaviour by connecting more deeply with them. One way to achieve this is to embrace behavioural coaching as a conduit to relationship building.

Author, strategic adviser and industry thought leader, Rob Macdonald, explains how practising behavioural coaching techniques such as empathy, courage and curiosity is key to enabling connection. He encourages advisers to refine their deep listening skills to enhance their client relationships and improve outcomes.

Deep listening involves allowing clients to express themselves without interrupting, encouraging them to share more by asking open-ended questions, seeking clarification when necessary to ensure accurate understanding and showing empathy by validating their emotions. It is also beneficial to incorporate mindfulness, self-reflection and being deliberate about listening to understand, as opposed to listening to respond.

These techniques should help you foster deeper communication with clients and gain an understanding of their context, ultimately leading to better results. 

As things change, some things will remain the same

Along with keeping abreast with your clients’ evolving needs, nurturing deep connections through behavioural coaching can enable you to maintain your relevance in their lives for the long term. 

As the world leans more towards the automated and instant, the significance of meaningful connection becomes increasingly valuable, a reminder that there are uniquely human attributes which are beyond the reach of algorithms.

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