Over the rainbow – taking your advice to new horizons

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What if there was a way to attract a whole new range of clients? A type of person who’s hardly thought about financial advice before, but who stands to benefit significantly from your services while delivering a major boost to your business?  Nick Green, communications manager at unbiased.co.uk, suggests there’s a pot of gold to be found.

If we have a toothache, we go to the dentist.  This is common sense, because from childhood it’s been drilled into us (ahem) that the dentist is the person who deals with that. But what if the decay isn’t in our teeth but in our savings? What if we have the ISA ache?  Cavities in our retirement funds? Naturally you say, ‘Go and see a financial adviser’ – but if this your job, then it’s not surprising you know the answer. Such a response wouldn’t automatically occur to a lot of people, because Mummy never took them to see the financial adviser when she handed out pocket money (or so we hope).  The seeking of financial advice is a habit many people have yet to acquire.

All we really know is that some people seek financial advice, and some don’t. This begs the tantalising question: what is putting the second group off? In other words, how can financial advisers tap into that group and sell services to them?

Let’s consider the potential size of this untouched market. People’s attitudes to their finances can be broadly divided into seven categories – a whole spectrum of different attitudes.

The rainbow of financial attitudes

The ‘Advice Moments’ research carried out by unbiased.co.uk revealed that for many key life events, including buying a house and retiring, a large proportion of people surveyed did not seek professional advice. When taken all together, the findings suggest that considerably more than fifty per cent of people who might reasonably be expected to have sought financial advice, did not do so. Why didn’t they?

The seven attitudes to financial advice could be summed up like this:

  1. It’s all too confusing. Money is money, I just earn it, spend it and save some if I can.
  2. I see no need to seek advice about money. I’ve done all right so far by myself, so there’s no reason to change.
  3. I would like to do more with my money, but I’m not convinced a financial adviser is the answer. I can do my own research online.
  4. I have considered seeking financial advice, but I don’t really know where to start. I’m worried an adviser will blind me with science and then bill me for more than I make in savings.
  5. Seeking financial advice is on my to-do list, but it’s hard to get around to it.
  6. I’ve benefited from financial advice in the past, so now I’m confident that I know what to do by myself.
  7. I regularly seek financial advice, so I can stay in touch with the latest developments and opportunities.

The ideal client, clearly, is number seven. The rest of them, numbers one through six, are unlikely to be on your list of active customers. Some are going to be easier than others to market your services to, while others (e.g. one and two) will be harder to reach. However, they are all worth trying to win over, because these six categories account for the 50+ per cent of people who could benefit from financial advice, but are not currently seeking it. What if all these go-it-aloners could somehow be brought into the market?

Through the looking-glass

It may sound absurd to suggest that financial advisers everywhere could double their client lists. Yet it does seem at least probable that many go-it-aloners could be won over. Even if just one in ten were to change their attitudes by a single step (so one becomes two, two becomes three etc), that could translate to many thousands of additional clients flooding into the market place.

How can advisers work to make this happen? The first step is to look in the mirror at what they are doing now to promote themselves. Given that most of its client base comes from category seven (with some from category six), the tendency is to gear marketing efforts towards those dependable groups. These are the groups that already understand many financial issues and the benefits of advice, so they should readily respond to words like ‘financial’, ‘tax planning’, ‘portfolio management’ and so forth.

However, for the groups lower down the spectrum, such terms may be an immediate turn-off. One might suppose that those beyond a certain level of income – the more affluent – will naturally gravitate towards financial advisers, and learn to love phrases like ‘risk tolerance’. Well, some may, and some may not. It would be foolish to forget those in the second camp. Advisers should always be thinking about how they can appeal to such individuals on their own terms, bypassing the usual industry language and focusing instead on the issues that these people already care about.

For instance, a person might say, ‘I’m not interested in finance,’ yet still have detailed hopes and dreams for getting married, buying a beautiful home, going on holidays of a lifetime, raising a family, retiring somewhere sunny, and leaving a decent legacy to their loved ones. What they’re actually saying, of course, is that they’re not interested in stocks and shares and compound interest calculations and so on. A great many people with money to spend may yet struggle to see through the graphs and charts to understand what finance really means: being able to live the life you want.

The findings of our Advice Moments report strongly suggest that those currently seeking financial advice represent only a portion, perhaps less than half, of the number potentially in a position to do so. For the remainder, those who make up categories one through six in our rainbow of attitudes, there are various obstacles standing between them and the advice they need. These obstacles may consist of apathy, anxiety, lack of awareness, over-confidence, lack of time, or a combination of them all. The challenge for today’s adviser is to find ways to break through these barriers, with new approaches that dare to be different, which can appeal to a far broader range of people. The custom is out there; it’s for the most imaginative and innovative advisers to go and win it.


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