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How do you decide who gets service

I’d love to share more about the flaws in the way many advice firms approach their service offers, and the tweaks that can be made to turn them into something more progressive and better aligned with the expectations of clients in the digital age

In doing, hopefully it’ll provide more practical insight into ways of building an advice firm with stable ongoing revenue streams coming from clients who are committed to working with you over time.

I’ve been coaching for long enough to have seen one model over and over and over again when it comes to service offers. I imagine you know exactly what I’m getting at; Platinum/ Gold, Silver. Triple A’s, B’s, C’s …all that sort of stuff.

It’s a model born of the age of commissions, where you ran an expense report and split the revenue received from clients into those who pay you a lot, all the way down to those who pay you a small amount.

The next step was usually to create these differentiated packages to deliver value, but underneath it all they kind of ended up being pretty much the same thing with slightly different flavours.

The problem is we’re not in that world anymore, and as you may already know, it fails to recognise that not all clients are delegators.

As a matter of fact, less than 15% of the Aussie market are delegators, and that goes some way to explaining why our industry continues to capture such a small portion of the market.

The vast majority of the market is made up of the other two types of clients.

Validators: people who feel like they have a plan and just want to you run it past somebody without having to give up control, and

Self-directed people who want information and the ability make their own decisions

By the way, just because someone’s self-directed today, doesn’t mean they wont develop into delegator eventually, but it’s most unlikely if they’re not given the opportunity to engage the way they want to to begin with. They’ll likely go elsewhere.

Within our program we have a model called the Progressive Offer, which walks through how to deconstruct a service model and offer, to re-create something which very much in line with the Ascending Advisory Model I’ve spoken about before.

However, this is not about that, but rather an important subset of it. This is about how you make the decision to recommend a certain package to clients

There are four factors to take into account as to whether a client can be self-directed, may need some help, or should frankly outsource altogether.

The first one is time.

Depending on the complexity of someone’s affairs, there will be a time commitment clients need to make – weekly, monthly quarterly – to manage their affairs. Some might say it’s four hours a month, others more. The point is not the number, but rather the idea that both you and the client needs to understand what’s needed. The outcomes you’re both working so hard to achieve are not just gonna happen by themselves. Asking questions about the maintenance required is about making a call whether they’re really going to maintain it or allow it to fall into disrepair (again?).

The second to look at is knowledge.

Do they have the knowledge to manage it? Some will be smart people with a solid base of knowledge that can be worked on over time. This is where partnership works. Over time you will teach them what they need to know whilst also helping to get the result. You may find yourself advising others with high levels of knowledge, meaning you might be comfortable with them directing affairs with a guiding hand. On the other end of the scale, it would be difficult to agree to allow clients who clearly don’t have the knowledge to take charge and accept the obvious risk of being blamed when something unexpected happens. That would instead be one scenario where you want to work with them in an outsource capacity at least for the first 12 months.

The third area is interest.

If somebody is interested in their money, they’re more likely to apply the strategies you recommended. If not, then a more hands-on approach is a matter for detailed discussion.

The final factor to consider is frankly is past performance.

As an adviser you might want to look back and make a call as to whether clients have managed their money effectively in the past and made smart decisions. If that’s not the case, you might potentially want to work closely early on rather than allowing them to do it themselves, regardless of how they want to look after it. As Einstein alluded to, getting it right early on has big impacts later in the game, and vice versa. (I’ll share a model about how to have the conversation with clients in the next week or too)

The analogy I’ve used many times is this one.

If you want to run a marathon, you have to achieve a certain level of fitness. The amount of work you may need to do with a personal trainer to get to that level will depend on how fit you are to begin with, your running experience and how easy you’ve found it to do similar stuff in the past

Clients are the same. When they come to you wanting help to finish their own financial marathons, you need to ask yourself the questions; do they have the time, knowledge, history of past performance and an interest to keep to the plan you’ve worked so hard to put into place to get them the results

If not, then you could be setting the wrong expectations from the start and lining yourself up for problems later on.

Service offers have a whole bunch of complex to them, but if you can start with the core idea of making a recommendation based on those four aspects, instead of a offering a pure choice, so you’re working with a client to identify what needs to be done in order to get there, then you’re starting on the right foot.

Anyway, thanks for letting me share one of my favourite topics, the Service Offer.

Would love to hear from you have you made the jump across to a more progressive service offer and, if so, what were the main things you did to make a success of it? Drop me an e-mail at comment if you’d like more information. Have a great week and speak to you soon.

If you’re interested in solving the profit, time and resourcing issues holding many advice firms back, I’ve blocked out ten time slots this side of Christmas to run 1:1 2018 planning sessions with those keen for help to solve one specific issue holding them back.

If you’re clear on how you’d like your business to be different in 2018, in a hour we’ll create a 12 month plan, do a stocktake of what you have to work with and define core constraints to focus on overcoming to make it your best year possible. We’ll identify the 1 project you should kick the year off with, and I’ll hook you up with some content from within the program to help you implement faster. 

If you’re keen, click here to book a call to express your interest via a chat. I’ll do ten of these before I break for the year, so once they’re gone, they’re gone.

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