What financial advisory firms should focus on in 2024

By: Jason Bernic and David Kop CFP®, Co-founders and Directors of FI Consult (PTY) Ltd

It’s more important now than ever that financial advisory firms stay abreast of local and global changes in the financial world, as these can have severe impacts on their clients. In this article, we follow several trends that are affecting FAs globally, including regulatory changes, shifting consumer behaviour, technology, the environment and adviser demographics, as well as the rise of advice over product sales.

  1. Regulation – We have been in a state of change since 2017 with the release of the RDR discussion document. Many of the proposals have been implemented and yet some of the important ones are still outstanding.
  2. Consumer behaviour – Consumer behaviour is changing not just in financial services, but in general. They want deeper holistic services. They don’t want to be sold a product, but experience advice. This has led to advisory businesses needing to update their charging methodologies and service models.
  3. Technology – The major benefit of technology is that it allows us to free up time and spend that time with the client. It also allows us to broaden the area in which we deliver services. Clients no longer need to find a planner next door to them, but can find the best in the country.
  4. The environment – With pandemics, wars and a cost-of-living increases, our jobs have become harder, but also more important. These environmental factors have helped consumers recognise the importance of advice and are actively seeking planners and advisers who can help them with these matters.
  5. Adviser demographics – We have both an ageing adviser base and client base. Globally, generational transfer of wealth is one of the biggest risks identified by financial planning firms. The focus should be on a plan for serving a younger and more diverse client base.
  6. Importance on advice – Financial advice is expanding from just the financial products we sell. Financial management issues for young professionals, debt burdens and retirement reforms are creating opportunities for advisers and planners to engage with their clients on these issues.

While all these trends impact financial planning businesses differently, there is one thing that financial planning and advisory business owners should focus on in 2024, and that is to be intentional about their business strategy.

Even if you think you do not have a strategy, you do, even if it is unintended. The best thing you can do for your business is to get intentional. Go through an exercise of defining and documenting your strategy to ensure that you can take advantage of the opportunity created by these trends.

Key strategies to build and grow your practice

  1. Embrace technology.
  2. Systemise your back office and focus on the client experience. Financial planning has moved from a telling and selling industry to a collaborative profession. You need to ensure that non-client-facing activities are systemised to free up time to do an adviser’s most important role – focus on client interactions.
  3. Change your mindset about regulations. The legislation is not something to be blindly complied with; in fact, blind compliance is what can hurt a business. If you rather try and understand why the regulations are in place, and then focus on how this can help you develop the client experience, you will naturally be compliant and be more client-centric.
  4. Build a niche – there is a saying that you cannot make all the people happy all the time. If you look at your existing client base, you may find that many of them share a common trait. This is what attracted them to you and you to them. A client exercise where you examine the traits of your most loyal clients will help you in creating a niche.

Staying competitive in the digital space

Technology has completely changed the financial planning landscape over the past 25 years and generously lent itself to improving both the client experience and the administrative function. High-speed computing power and cloud-based solutions have sped up processes and created previously unimaginable convenience. This means:

  • Advisers can work from many different devices from anywhere in the world, at any time
  • Advisers can manage and process information at scale 
  • Advisers can communicate in many ways, maintaining professional distance or creating intimate connection
  • Advisers have moved from manual calculations and spreadsheets to world-class scenario-modelling software that can be used in real time, in-person and online. 

Neither adviser nor client needs to travel anywhere anymore; however, one thing that will always remain is the power of connection. Robo-advice services many clients, to a point, but where bigger clients have more complicated problems, the personal touch continues to be essential. Where in-person meetings are possible, especially with higher-value clients, it is important to create such a touchpoint at least once, if not every so often. 

For advisers to remain competitive, they need to embrace technology, both on the front end (financial planning and client engagement) and the back end (administration and processing). 

Advisers need to…

  • Keep up with and be able to talk about technology with clients, business associates or anyone involved in and with your business. Failing to ‘be in the know’ around technology unfortunately represents a disconnection with the world. Imagine not knowing what Chat GPT is.
  • Own and use relatively up-to-date technology. It helps with business functions and processes,, takes a lot of administrative pain away, and lends itself to improved client experiences. There’s also the perception factor, e.g. iPhone 15 versus Sony Ericsson flip phone from 2003. 
  • Bring technology into your business and financial planning processes, from CRMs to financial planning software, online applications and straight-through processing. 
  • Go digital in terms of meetings and general communications. Create beautiful digital experiences, especially with virtual meetings, the most important factors being quality of video, clarity of sound, position of camera, lighting and background. Exactly as you would prepare a room for an in-person meeting. 

How to acquire new clients

From a business’s point of view…

Financial planning businesses should spearhead the marketing and communications process to create opportunities for their advisers to benefit from. The business is responsible for branding, reputation management and the opening of markets. The marketing activity of the business is more general than that of the respective advisors, but puts the advisors in a position to either create, or respond to, potential new clients more easily. 

There are three tiers to a business’s approach: 

  1. Foundational: website, socials, blogs, articles 
  2. Beneficial:  public relations, paid media, Google ads, partnerships, funnels and retargeting, events webinars, podcast
  3. Optional: community work, exhibitions, sponsorship, charities, endorsements, collaborations

From an adviser’s point of view…

If the business has a strategy, and any lead sources, advisers need to lean heavily into everything that is on offer. We came up with at least 171 different ways to get in front of potential new clients. These approaches span across 15 categories, some of which are: digital, thought leadership, social, community, networking and existing clients. 

Advisers would do well to consider what they have done in the past, whether it worked or not, and what they have considered doing, whether done or not. This is a starting point to explore the number of potential prospecting strategies. Add to this any new ideas, and anything else that has been seen or done. Advisers should then consider which of these ideas they could enjoy, shortlist them to one or two, and create a plan, which should include targets, activity and milestones, placed on a timeline, with a pipeline and an accountability function.  

Differentiating a business in a crowded market

Focus on your clients’ goals, needs and circumstances. Most of the industry is still selling product for commission, so when a professional financial planner places a client at the centre of his planning process, value unravels. 

Lead reviews with goals and circumstances – products, costs and performances are secondary. 

• Create a differentiating experience through:

  › How you show up. Who you are, how you communicate, commitments,  
  promises and follow-ups

› Your financial planning philosophy – what you do, how you do it and why you do it

› Your financial planning process – following the six-step financial planning process and standardising it throughout the business

› Using financial planning software for modelling and scenario planning

› Upskilling technically and also keeping up with markets and what’s happening in the world

› Thinking like an economist and having economics-based conversations

› Communicating with clients regularly and on special occasions 

› Having support staff that are client-centric and service-driven

› Be a thought leader – write, post, blog, get on radio and podcasts.

FI Consult provides information to financial institutions on strategy, operations and human engagement. Its mission is to help advice businesses unlock potential and lock in value. Visit www.ficonsult.co.za

David Kop and Jason Bernic are co-founders of FI Consult, a Business Management Consultancy that works with financial planning businesses to help them grow and scale. Kop has two and a half decades experience in financial planning, including roles in para planning, advising (independent and tied), owning his own business and working at FPI, the professional body for financial planners. Bernic is a Certified Financial Planner professional and has over two decades of experience in financial services, from financial planning and international wealth management to coaching and consulting

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