As we witness evolving electronic and somewhat more relaxed business approaches, I am concerned this creates the opportunity for clients and enquirers to push regulatory boundaries that may not have been challenged before. So, what to do?
1) Tell a client what you do
Lay your proposition out at the outset of any contact clearly, transparently and promptly. I appreciate there are regulatory rules that say you must anyway, and you should also represent your own values of doing business. But make your approach clear to avoid any future ambiguity.
The answer is in the client’s questions to you. Always ask yourself, where are they going with that question? Does it fit with where you think you are? And if not, stop and clarify early.
We have recently had enquiries from new individuals who are leading us towards being insistent on defined benefit transfers. If warning signs crop up, we will challenge these early to clarify and actually stop if need be to ensure that they - and we - do not waste any time in detailing the service and process that we use. And if it doesn’t fit with them, stop!
3) What if they are really insistent?
If you laid out your proposition correctly and clearly at the outset, in a focussed business fashion, then it is easier to ‘revert to type’ by going back to the initial contact and its professionalism. Being firm in your views and opinions of what is right for the client is paramount and you do have the right not to act if you believe that it will generate a poor outcome. An adviser should not be an order taker!
I have no doubt we will see claims galore on the back of recent DB transfers and, in this instance, if you won’t face the challenge of saying no to an insistent client now, you may well do in five years’ time when the professional indemnity claim comes through.
4) How to drop a client
It was interesting that post the Financial Advice Market Review, many advisers’ incomes and profitability increased. I am not convinced that this was the outcome anticipated by our regulator, but it certainly focussed many minds on segmentation and subsequently profitability.
However, more simply, if a relationship is over, it’s over…whether it was profitable or not. The client will know this as well.
Demand for our services is growing all the time, and having the confidence to know that business can be replaced profitably is vital in knowing when to write to a client, usually based on your terms of business (again referring to the start of the relationship) to bring the relationship to an end in a professional manner.
You are likely to need to give notice, and may need to provide a summary statement of the client’s position so that they can consider their circumstances with a new adviser. However you achieve it, be professional, courteous and firm.