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Annual client reviews 'simply not enough' in post-Covid world

Annual client reviews 'simply not enough' in post-Covid world

The rise of hybrid advice models bring opportunities for intermediaries, but advisers have warned the profession must strike a balance between sporadic communication and the risk of "over-provision" of their services.

The prospect of regular face-to-face meetings is becoming a reality again for intermediaries, but advisers are not willing to completely let go of the virtual sessions on which they have relied over the past 18 months.

Speaking on a panel at FTAdviser's Financial Advice Forum on September 7, Kanishk Swarup, partner at St James's Place Wealth Management, said a hybrid working model allowed him to engage better with his clients.

He said: “The previous model where a financial adviser would have a review once a year with a client just to touch base is simply not enough.

"I think we need to do a lot more thanks to the technology that is now available to us to increase those touch points to stay in touch to understand what's going on, and being far more dynamic than we've ever been before.”

He said the most important thing of being a hybrid adviser was to be "completely agnostic" to the platform used to communicate with clients.

"Whereas it used to be a face-to-face meeting, so you would drive to the client or you would get the client to visit your offices and that is where you would do your meetings, I think increasingly now especially post Covid, it doesn't matter whether it's face to face or whether it was coming over Zoom or emails."

Richard Ross, director at Chadwicks, agreed technology was allowing him to engage remotely and give a better service to his clients.

But this was just one aspect of being a hybrid adviser, he said. He also warned of the perils of advisers "over-providing" to their clients.

Threat from the outside

“What tends to happen - and you can see this happening in financial services all the time - is that the incumbent advisory practices will tend to try and move higher and higher up the value chain,” he said. 

“They'll do that by adding more and more services to what they're providing and in doing so they are trying to get to those more profitable clients.”

In doing so, Ross explained, for many of their clients advisers were “over providing” and in the meantime, disruptors were coming in at the bottom asking what these clients really need to get the job done.

“They will come in and they will start eating out the smaller clients. Of course the incumbents don't even notice because these are the clients who are investing £5,000 to £10,000 and incumbents aren’t interested in those, until what happens is the disruptive innovators get sufficient critical mass to start eating into the dinner of the incumbents.”