How to avoid proposing cookie cutter financial plans to clients
By Audrey Heng
As a financial advisor, it is often drilled into your mind that every client is unique, with their own goals, risk tolerance and financial situation. Yet it can be tempting to rely on pre-packaged solutions when prospecting new clients, as it can take significantly more time to truly understand their needs and craft a personalized plan. However, cookie cutter financial plans may result in a misalignment with clients’ expectations and result in higher client attrition. Michelle Ngiam, a seven-year MDRT member with one Court of the Table and one Top of the Table qualification from Singapore, shares her insight on how you can efficiently tailor your advice based on your clients’ specific needs and build more meaningful relationships with them.
When it comes to customizing financial plans for clients, Ngiam believes that it all starts with genuinely wanting to understand her client or prospect. She shares, “I find that it is very effective to make emotional intelligence the center of my customer experience strategy because I am using my heart to empathize with them and their unique circumstances. We are often taught to think in our clients’ best interests — if you were in a client’s shoes, would you make the same decisions they did? What would be best for them? Would you do the same if you were them? There should not be a cookie cutter financial plan in this business because every individual’s needs are different. There is no one-size-fits-all solution. People matter in our business, so we should show them that they really do.”
She emphasizes that while two clients may have similar backgrounds, this does not mean that they have the same financial dreams. “We can have the same framework that we follow when planning for our clients, but the financial plan and strategy should be unique to each individual. Even if the same product was proposed, it should be tailored to the client’s financial situation and deliver real value. At the end of the day, we are here to help our clients get closer to their dreams in their own way and in their own time,” she advises.
To gain a comprehensive understanding of her clients’ diverse needs, Ngiam highlights two key points to keep in mind:Know your clientele
This would mean understanding how different groups of clients are when it comes to age, preferences, interests, motivations, concerns, and so on. A helpful tip is to start by sorting your clientele into various segments like occupation. By doing so, you will have greater clarity on your client base. For example, if you have a group of clients who are lawyers, find out more about where they spend time together, what are their habits, their career paths, their working hours and their lifestyle, financial, career, and personal concerns. By doing such research, you can better meet their needs and tailor your services and interactions accordingly.Ask for feedback
It is always a good habit to ask your clients for feedback so that you know what you did right and what could be improved on. Ngiam sends out surveys to her clients every one to two years to get a gauge of how she is faring. Other than these surveys, she also schedules check-ins with clients to ask them for feedback through a less formal manner. She shares that every client will have different expectations of you as their financial advisor. By getting feedback on what works and what does not, this will give you a better idea on what your clients need from you; and if clients see you see you making changes based on their feedback, this will naturally create a strong positive impression of you in their minds. Ultimately, Ngiam believes having a good but standard approach to all clients may be sufficient in most cases. But, if you would like to deepen the relationship with individual clients, providing a unique experience would enhance the connection.
To show how these strategies are incorporated into her practice, Ngiam recounts this client she worked with last year, “I first met this client of mine through a referral. Before meeting him, the person who introduced me to him gave me a brief overview of this client’s situation and how I could help him. When we first met, we spoke at length regarding his initial requirement which was a single need. During the conversation, many other concerns were brought up and we delved deeper into each one. It turns out that his family was not sufficiently covered with insurance, and he had not done proper retirement and estate planning as well. I took down notes of our conversation and gathered the relevant financial data that I required to do up a financial analysis for him. The information I required was largely the same as other financial analysis that I had done for other clients, but the data gathered were all unique to this client and his circumstances. A week later, I presented his detailed financial analysis which consisted of every aspect of financial planning. He could see where he stood in terms of his financial planning and where the areas needed to be improved on. The analysis alone gave him clarity on his situation. With that, there were recommendations on each aspect that could be improved and enhanced.”
Ngiam believes bringing real value to the client is the first and most fundamental thing to achieve as financial advisors. The next step would be to provide relevant solutions to help your clients make the right decisions so that they can achieve their financial dreams. By adopting active listening and asking the right questions, you can uncover other needs that may have been lying dormant or undiscovered. This will help your clients get a better sense of their overall financial health and situation and what could be done to address their unique needs and goals.