What 2020 taught us about the adviser-client relationship

twitter-iconfacebook-iconlinkedin-iconmail-iconprint-icon
Search supported by
What 2020 taught us about the adviser-client relationship
Credit: Anthony Shkraba/Pexels

As client demand continues to move away from transactional advice models towards more holistic planning, client expectations are now focused far more on intangible components.

Now, it is less about a client paying a fee and the adviser delivering a piece of advice, and more about a general feeling of value from the relationship.

Creating this value is not an exact science, rather, more a combination of skill, relationship, expertise and anticipating what a client might need.

The trust that a relationship based on these principles brings is vital to alleviating any uncertainty that 2021 may bring.

Of course, the ultimate outcome of a client achieving their financial goals remains the single most important measurement of a successful client-adviser relationship.

However, the intangible components appear to increasingly have the greatest influence over whether a client achieves their goals with the adviser who originated their financial plan.

It is important to recognise that good advisers can offer a great deal of value to their clients and appreciate the critical nature of their role as client advocate.

Intangible value

This is because we, as humans, value that inherent feeling that someone cares and is truly looking out for our best interests.

Often, we perhaps subconsciously rely upon this to gauge happiness or disappointment.

The intangible components appear to increasingly have the greatest influence over whether a client achieves their goals with the adviser who originated their financial plan.

As clients are becoming more empowered, they may be motivated to make a change in their adviser partnership if they feel disappointed. 

What can set advisers apart in the eyes of today’s client is the retention of human contact when a client wants or needs it, combined with the option of a digital experience.

But what is key is that not just any old human will do, nor will a generic digital interface.

Clients want their advisers – in fact, the adviser’s entire team and digital interface – to know who they are and the nature of the relationship, and be knowledgeable about their individual circumstances.

When they call or log in, clients want to feel confident that they will be met either physically or virtually by someone they can consider a personal coach or confidante.

Clients may not want an adviser relationship that is akin to a utility provider and the inevitable unfulfilling experience that follows due to over-reliance on automation and generalisation. 

Today’s clients also expect proactive flexibility and adaptability. Clients want confidence that their adviser can help them adjust to changing circumstances.

Covid impact

The pandemic has been a great catalyst for recognising that extreme events and 'what if' moments actually do happen, and when they do, clients want to know that their adviser is ready.

Covid has been a good example of a moment in time where advisers need to step up and adapt a plan or, even more crucially, explain their rationale when not adapting a plan.

It is not only during uncertain times that this applies; when significant positive events happen, such as unexpected cash windfalls, clients still expect agility and adaptability.

Clients may not want an adviser relationship that is akin to a utility provider and the inevitable unfulfilling experience that follows due to over-reliance on automation and generalisation. 

Being able to recognise these moments and act accordingly is something that clients now expect from their advisers.

The flexibility and adaptability required by a tumultuous 2020 are vital skills that advisers should prioritise into the new year. This new model of an agile and transparent client-adviser relationship will likely be the new standard in 2021.

While there are many examples of evolving client demands, such as transparency and flexibility of fees, one critical area that clients are looking to their advisers for is a single, central, overarching relationship that can help navigate all of their life planning needs.

The use of a single adviser relationship to help plan across their retirement, insurance, estate, education and philanthropic giving, to name just a few, is becoming a common demand from clients at all levels of wealth. 

Behind a number of these trends is a more significant driving force: consumers looking to streamline their lives and make an impact on society.

Covid has been a good example of a moment in time where advisers need to step up and adapt a plan 

It is key that the complex pressure points 2021 is set to bring, including ethical investment and regulation, are duly integrated into holistic adviser offerings.

As complexity escalates, advisers that build personalised relationships that offer flexibility, simplicity and adaptability should flourish. This will especially ring true as we look into the new year where clients will have an increasing amount of choice in financial advice options. 

Russell Andrews is head of solutions & marketing UK, Europe and Asia – asset management distribution at SEI