The expression ‘knowledge is power’ is well known and until recently was all too often seen in the sales process. Just think about how you would have bought a car 10 years ago. You would first go around a few car showrooms to see the models available, then have a chat with your friends to gather their views, and finally buy a copy of ‘What Car’ in the hope that it could provide a review. Ultimately though, the person that you had to rely on most for information was the salesman. Of course they had the knowledge about price, performance, reliability, competition etc, and the power to decide how much of this to share. This knowledge gave them the power.
Fast forward to the present day and things have changed a lot. Now if you want to buy a car you first go online to research the different models and read the reviews of existing users. Next you search for the best deal for a particular model, along with information about the garages who sell the car. Armed with this knowledge, you can march to your local dealer, tell them about the best deal you know about and ask them to better it. Access to information has moved the power from the salesman to the consumer.
What has this got to do with financial services? Well 77% of consumers now see the internet as the best method of researching financial services products, 43% think financial discussion boards are a valuable source of information, and 39% think the web is a good place to get a second opinion post the receipt of advice.
So against this background, how can IFAs, who effectively exist by selling knowledge, continue to thrive when the consumer expectation is that information is for free?
The answer lies in understanding where an adviser can add value to freely available information, and there are a number of opportunities to do this, including:
· Personlisation: Converting generalised data into relevant, meaningful information which is specifically pertinent to an individual client.
· Insight: Using knowledge and experience to interpret information so as to communicate the implications of that information. In the context of websites this means not just pumping out news but commenting on it.
· Currency: Ensuring that the knowledge imparted reflects the current situation rather than the huge legacy of outdated information that circulates online. Again with in the context of the web site this means ensuirng appropriate, regularly updated content is provided.
· Authenticity: This comes from the ongoing provision of useful information to your clients at all times, not just when there is a sale in the offing.
· Convenience: Yes, your client can find all the information they need online, so make sure they think that finding it out from you is easier.
· Authority: I could probably fix my car’s brakes using information online, but I want the reassurance of an expert when it comes to the safety of myself and my family. The same should be true of financial advice, so communicate your expertise.
Achieving this differentiation requires thinking about the whole of your proposition and how you communicate it. But it is only through understanding and demonstrating the value add that an IFA brings to the relationship they have with their client that they will be able to thrive if the world of free and unlimited information.