13 – Proving your CVP to clients: the first interview

Don’t tease your clients. Solve their problem as soon as you can.

Clients come to financial advisers because they are worried. They have a problem and they do not know what the solution is. The problems can be varied. Some clients will be worried about what happens to their loved ones if they are killed or injured. Or they might be worried about whether they have enough to retire. Increasingly, people are worried about whether they will be able to afford the home that they want (or whether their adult children will). They might be worried about what happens to their disabled child after they die.

The point is: the client is worried about something. The best thing the adviser can do in the first meeting is soothe the worry. 

Consider an example: a husband and wife in their late fifties/early sixties. He has had a recent bout of cancer treatment and, while he has returned to work in a part time capacity, he is unsure whether he will be able to continue with this work. He is finding it more tiring than it has ever been before. For the first time in a long time, his wife has found herself contemplating life without her husband. She also works part time in an allied health role. The couple is in the late stages of raising their children: the youngest is in her last year of high school. They have been head down and bottom up working and raising their children for the last 20 years or so and they have no real idea about their financial situation. 

What is this couple worried about? He is worried about whether he has provided well enough for his wife and kids. He is so used to being the main breadwinner that he is now concerned how his family will cope without his income. He is worried that he has failed as a husband and father. She is worried about how much time they have left together, and how best to spend that time. Can they afford to take some holidays and do some of the things that they always postponed? She hates the thought of her husband having to work to support the family right up to what might be his final months. She knows he has worked hard and wants him to have some reward.

Before the first meeting, the clients provide a fact finder. The fact finder reveals they own their house, in a leafy part of the city, outright and have done for twenty years. As a result, what they think it is worth is much less than the current market valuation. Their superannuation balances are both healthy, and one of his funds includes a generous pension that can revert to his wife in the event that he dies.  They also have about $100,000 in cash and cash equivalents sitting ready to be used.

In the first meeting, the adviser does a few simple things: she looks the property up on www.domain.com.au’s home valuation guide, and shows the couple that their current valuation is based on 2006 prices, not 2016 ones. She points out where their relative wealth sits in comparison to other couples their age. It is above average. This reassures the husband that he has done a good job of establishing a solid wealth base for his family. His family is better off than most.

Very importantly, the adviser shows them they can certainly afford the first of those holidays that they have always promised each other. The wife is now in tears of relief. 

At this stage, there has been no financial product recommended. Why spoil the mood? Leave any technical talk (Transition to retirement penrions, extra contributions, etc) to the next meeting. In this one, focus on providing immediate value to this couple.

The adviser knows she has done this because the clients are visibly relieved. Happy tears are flowing and the tension is oozing away. This is the best news this couple has had in quite a while.

The adviser has demonstrated that she can help the clients’ solve their problem. In the first meeting, the client value proposition has been manifest: “I will relieve your worries and help you manage the next few years of your life so that, if the husband dies earlier than planned, you will have no regrets.” 

The client will happily sign on as a regular client and the adviser can look forward to many postcards from the couple in the next few years.

The adviser can also look forward to the clients’ family and friends making contact. She is definitely having her praises sung in two staff rooms and at all the family functions.  

Solve problems from the first time you meet your clients. Prove your CVP. 

The Dover Group