Today on Listen to the Experts I’ll be talking with Andrew Inwood, the Principal & Founder of CoreData research. In the wake of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industries, Andrew has some insights into how we should move forward in a world who’s seen its confidence in the financial sector pummeled in recent weeks.
(02:00) – Five Ways to Rebuild Trust in the Wake of the Royal Commission – In his recent article, Five Ways to Rebuild Trust in the Wake of the Royal Commission, Andrew talks at length about how to move past the mistrust created by the Royal Commission. Many people have had their lives fundamentally changed for the better by their financial planner. There are no systems with zero error, fraud or malpractice. It’s important to acknowledge that fact, but also to recognize the fact that the vast majority of experiences are unquestionably positive.
(03:30) – What You, as a Financial Adviser, Should be doing in the Wake of the Royal Commission – Talk to your clients. Reach out and let them know what you’re doing, how you’re feeling, and what’s happening. It’s important to start to segment your customers behaviorally. What does happiness look like for each of your clients? The more you know about your clients’ motivations, the better you can serve them.
(07:45) – How to Start the Conversation – The best way to have a conversation about something as impactful as the Royal Commission is in person. Face-to-face meetings are time-consuming, so if that’s not practical, a phone conversation is the next best option. If you have to send out mailers or emails, make sure they’re personal. Don’t send form letters. Make a connection. Construct an outline of the ways you, as a financial planner, add value to people’s lives.
(10:00) – Demonstrating Value – We in the financial sector do a lot of things well. One thing we don’t do particularly well is talk about the ways we’ve transformed people’s lives. We don’t talk about the decisions we’ve made with our clients that have taken them from financial chaos to stability; this is a psychological construct called anchoring.
(12:20) – What to Write in a Letter to Clients Regarding the Royal Commission – All financial advisors should be pointing out that the system is under examination. As with any system under examination, the commission is finding problems; false charges, people being recommended into poor products, etc. It’s essential to demonstrate that there’s a reason those things aren’t happening to them. The segment of the sector engaging in these bad behaviors is small.
(13:20) – What to do if Your License Aligns with a Big Financial Institution – The key to surviving the Royal Commission, regardless of who your license aligns with, is to be able to articulate the value of your services. Is there a platform fee on your client’s invoice? Make sure you can explain that charge. Every cost must be articulated for your client.
(14:25) – If I Ignore This, Will it Go Away? – Putting your head in the sand because you’re not proud of the work you’re doing won’t make the problem go away. If you’re charging for services you’re not providing, you’re going to be found out. Lead the change. Provide services you’re proud to charge for.
Be proactive, talk to your clients, and get out in front of this thing. If you’d like more information about CoreData or would like to read Andrew’s piece on surviving the Royal Commission check out the company’s website, CoreData.com.au. If you’d like a copy of Andrew’s research, send him an email at firstname.lastname@example.org. Thanks so much to Andrew Inwood for putting the time aside to talk!