What price sensitive clients are really asking you to do is to demonstrate the value of advice
You would be hard-pressed to find many Australians who wouldn’t benefit from quality financial advice. But for some, convincing them that it is worth paying for can be challenging.
What price sensitive clients are really asking you to do is to demonstrate value for money. They want to understand how they will benefit from advice, the level of service you’ll provide and why it’s worth some money.
The intangible benefits, such as the peace of mind that they have an expert supporting and guiding them are equally as valuable as the financial benefits, and these need to be articulated too.
Here are five simple techniques to help you communicate your value.
1. Demonstrate that you really understand you client's needs
“Understanding your client is the single most important thing you can do when it comes to overcoming any price sensitivity,” says Noel Yeates, senior adviser for Macquarie Wealth Management. By clearly articulating that you understand your client, what’s most important to them, their hopes, their dreams, and that you have the skills, experience and knowledge to help them get to their goals, you will begin to transform perceptions.
“The issue is not with the client, it’s your ability to demonstrate your value to them. Value in our space is not simply doing a transaction, it’s pretty much everything but. The value is in the research, it’s in the risk management, but most importantly it’s in understanding the clients’ needs and being proactive with those needs,” says Yeates.
“You need to show the client how you’ll be looking out for their interests, especially at times when they might not be looking out for or even aware of any risks.”
2. Separate the value of advice from market performance
Given the value of advice is subjective and varies between clients, it may be tempting for advisers to want to measure some of their value to clients on an objective measure, such as investment performance. However, simply focusing on investment performance may mean you’re missing opportunities to demonstrate your true value.
Advice is important when things are good, but it’s crucially important when things are tough. It is often during times of market turmoil that the real value of advice comes into play. In these circumstances, you can help to prevent clients from acting on fear and abandoning their well-considered, robust investment plans. For the client, having a safe pair of hands looking after their interests, and expert guidance to ‘stay the course’ can be more important than an investment return at a given point in time.
By separating the value you provide to your clients from market performance, you will be able to focus your conversations on the benefits of your long-term strategic plan.