Zurich’s recent Intergenerational Advice Masterclasses not only brought to advisers deep research, practical solutions and a process to the challenge of becoming the “family adviser”, but also created a forum where advisers shared their endeavours, successes and failures in the quest to become the central hub in a client’s tribe.

In a four part series the dialogue of these Masterclasses is shared, to deliver an increase in the number of Australians seeking financial advice, by tapping into the most powerful institution an adviser can have a positive influence on: the family.

The earliest “professionals” arguably were the medicine men and women of tribes, the shamans, who presided at all rites of passage such as births, deaths, marriages. They mediated between the inner workings of the tribe and its external affairs[1] . Today, who holds that mantle? An accountant; the family lawyer? Who has a position as the central hub of a family’s affairs who could mediate for the family from matters financial to social?

Perhaps this is the future for the “Trusted Adviser”. David Maister, writes of the valued resources and relationship strength that leads to becoming the trusted adviser[2] . The packaging of those resources, and the way to gain that position in a client’s world provides the right to win in the differentiation stakes that ultimately leads to satisfied clients and intergenerational relationships. That right to win is the centre of the triangle that requires more than the building of valued capabilities and a service promise that delivers them. It requires the building of a pitch that actually means something to the clients you are trying to attract.

It is that pitch that becomes vital, for not only must it be compelling, but it must be simple to articulate by the advice business and by its clients. It is in that way that the promise of the proposition gains life and is shareable.

The simplest proposition we have seen that works because everyone in the business embodies it, is this:

“We know that no-one wakes up in the morning and says this is The day I’m going to get the families estate, insurance and wealth plans in place! But all of our clients want to live well and look after their families.”

It works because fundamentally it taps into a base drive that the clients (that this businesses works with (families)) have at their core: a drive to provide a better and satisfying life for their families.

So for any business it requires some self awareness. Who are our clients? Why do they use us? What wants goals and dreams do they have? What are the commonalities? This applies for each subset of clients: singles, young families, professionals, mature families, retirees, seniors.

At each stage there may be different drivers and being able to offer differentiated services and a call to action that has meaning at each stage is critical to staying relevant and valued at each life stage across the generational divide.

• This is the secret to Intergenerational Advice success. This is also why many attempts at delivering an intergenerational advice proposition have failed: The business does not have a believable value proposition or “why” statement.
• The business has not built consistent, repeatable, sustainable capabilities around an intergenerational advice proposition.
• The business does not have a service model for intergenerational advice.

For an advice business the challenge is to understand your clients, construct your pitch, develop the capabilities that are relevant and deliver those capabilities consistently, reliably and sustainably.

The family advice proposition once you do this moves from a relationship delivered by default to one of design.

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[1] Michael Henderson, “Get Tribal”, http://www.culturesatwork.com/books

[2] David Maister, “The Trusted Adviser”

Click here to view Video: The intergenerational advice challenge and solution – Part 1

Click here to view Video: The intergenerational advice challenge and solution – Part 2

Click here to view Video: The intergenerational advice challenge and solution – Part 3

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Figuring out what tasks you do can help you increase your efficiency.

Placing a higher value on your time can be a game changer for many advisers, and often is the catalyst for significant changes in value proposition, business model, remuneration structure, resourcing and technology usage.

The first crucial step in such a process is to establish how your time is currently valued, which may require extensive analysis of your business metrics. If you haven’t done this before you may be surprised by the outcome!

By working out your effective hourly rate and comparing to external benchmarks you can get an immediate sense of whether you are under or over valuing your time (under is more likely).

Next you should look at all the tasks you perform in your role. Do you simply give advice or do you drive the whole process, from appointment booking through to fact finding, SOA preparation, application form completion and ongoing client care? If you answered the latter you need to consider whether it the best use of your time to perform these non-advice tasks.

The time you take to complete personal statements (and the subsequent follow ups) is non revenue generating, so why not outsource (using teleunderwriting) or delegate that process, freeing up your time to see more clients and provide more advice (clients value your advice, not your form completion ability).

Consider which other tasks you do which could be delegated to your staff; this can help with their development as well as lowering the effective cost of that task. And think about outsourcing too, using paid external services or the many free service options offered by most insurers.

The Future Ready V whitepaper found that the average adviser does only 5.7 clients facing appointments per week, begging the question about whether they are spending their time in a way that delivers the best business outcomes.

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This is an extract from a collection of business improvement tips for advisers, launched at Zurich’s Trax2Success national roadshow, featuring the 2013 AFA Adviser of the year Jenny Brown.

Click here to read Hot business tip number 1: Look after yourself and your staff

Click here to read Hot business tip number 2: Survey your clients

Click here to read Hot business tip number 4: Review your client onboarding process

Click here to read Hot business tip number 5: Adopt an estate planning methodology across your business

Click here to read Hot business tip number 6: Tailor your communication strategy by client generation

Click here to read Hot business tip no number 7: Change your approach to review meetings

Click here to read Hot business tip number 8: Create a differentiated service offering (segment your client base)

Click here to read Hot business tip number 9: Set up a Board of Advice

Click here to read Hot business tip number10: Develop a client retention strategy

Click here to read Hot business tip number 11: Run a program where staff drive improvements

Click here to read Hot business tip number. 12: Build your emotional intelligence

Click here to read Hot business tip number. 13: Go Social

Click here to read Hot business tip number. 14: Get better at handling objections

Click here to read Hot business tip number. 15: Create stronger referral sources

Click here to read Hot business tip number. 16: Set up a Google account

Click here to read Hot business tip number. 17: Learn from leading advisers

Click here to read Hot business tip number. 18: Make better use of technology in your business

Click here to read Hot business tip number 19: Improve your office environment

Click here to read Hot business tip number 20: Develop a great value proposition

Click here to read Hot business tip number 21: Make more use of video in your business

Click here to read Hot business tip number 22: Optimise your website for mobile

Click here to read Hot business tip number 23: Have a marketing plan

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Mr. Francis Kinniry, a Principal of Vanguard’s Global Investment Strategy Group, who developed the concept of ‘Advisers Alpha’ a number of years ago and recently co- authored a research paper of the same title, is visiting Australia this week speaking to advisers about this paper which asks: ‘What additional value (or ‘alpha’) is gained for investors when they work with a financial adviser?’

“We wanted to explore the advice value proposition through multiple lenses, including the key question of what is the opportunity cost for investors of not working with a financial adviser,” Mr Kinniry said.

Mr Kinniry has called on advisers to consider a new value proposition based on alternative skills and expertise.

In his Adviser’s Alpha model, added value is demonstrated by the adviser’s ability to effectively act as a wealth manager, financial planner and behavioural coach – providing discipline and reason to clients who are often undisciplined and emotional – rather than by efforts to beat the market.

“Demonstrating value for advisers will become increasingly important as the compensation structure evolves from a transaction-based system to a fee-based, asset management framework,” Mr Kinniry said. “However, providing a well-considered investment strategy and asset allocation is as important as an adviser’s investment acumen and ability to deliver better returns than the markets.”

“While adding value is the goal, advisers may be better served by changing their performance benchmark from market returns, to returns that investors might achieve on their own, without professional guidance.”

Rather than investment capabilities the Adviser’s Alpha model relies on the experience and stewardship that the adviser can provide. The model focuses on asset allocation, rebalancing, tax efficient investment strategies, cash flow management and, when appropriate, coaching clients to change nothing at all, rather than relying on market outperformance.

Historically, many advisers have sought to add value through active strategies such as tactical asset allocation, fund selection and rotation and securities selection – despite the mounting evidence suggesting that these efforts will help neither their clients nor themselves in the long run.

“A value proposition based on outperforming the market places the adviser at a meaningful disadvantage,” Mr Kinniry said. “Not only does success depend on factors outside of the adviser’s control, but it can also promote a ‘horse-race’ mentality among clients, leading them to depart if the promised outperformance does not materialise.”

“The benefit and wisdom of not allowing near term market actions to result in the abandonment of a well thought-out investment strategy can be underappreciated in the moment,” he said.

For a full copy of Vanguard’s Adviser’s Alpha research paper visit www.vanguard.com.au/alpha

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