Financial planning is really about… what is in it for your client

We can recall a SOA starting with the startling word “warning”. In upper case, bold and font size 50. It was not a good start. It was the worst possible start.

Your advice is supposed to be in your client’s best interests and appropriate to them. It’s supposed to make your client better off. So tell your client what’s in it for them, early and often. Make your client want to read your advice, feel happier and perhaps relieved for doing so, and keen to implement it as fast as possible.

This is simple and obvious when you are recommending an investment. You expect the long-term return from the investment to be better than the alternatives. Your expectations include an adjustment for risk, ie the possibility that the actual return may be less than the expected return.

So tell your client that you expect your advice will maximise their investment returns and leave them better off than they otherwise might have been.

A paragraph like this is appropriate and in everyone’s best interests:

We believe the recommended investment strategy will maximise your expected future net returns and leave you in a position where you can enjoy a more comfortable retirement, and leave a greater legacy to your children. Your family’s happiness will improve as a result of our advice.

If your SOA features a frontispiece, think about reproducing this paragraph in an elegant font and creative style where the client sees it up-front, and it can make a great first impression. First impressions are the strongest impressions.

You might think an insurance-only SOA is all about costs. Premiums, fees and commissions. It’s not. It’s about reducing risk in a way that increases the client’s expected long term economic utility, or better-off-ness. Or happiness. Yes, insurance is all about maximising happiness.

Your insurance advice should make your client happier. Your client’s sense of better-off-ness is increased by eliminating or reducing the financial consequences of the insured event occurring. Help your clients understand this so that they feel better about your advice.

Your insurance advice creates more expected benefit than expected cost. In the client’s eyes, and in the client’s spread-sheets, the expected benefit, ie the insured amount being paid if the insured event occurs, is greater than the expected cost, ie the premium. The client’s perceived economic utility is enhanced, and the client feels happier.

Try this paragraph:

Our advice means your concerns about what might happen to your family if you die prematurely or lose your health and cannot earn an income will fall away.  Our advice helps secure your family’s financial future.”

The Dover Group