How to convert client care promises into action

Advisers need to back up their client care claims with action. That’s the theme of an
article in New Model Adviser this week. The piece focuses on the importance of putting your customers at the heart of your business.

Here we look at what this means in practice, and what firms should be doing to ensure their promises are converted into action.

A mismatch between aims and reality

In researching the article, New Model Adviser looked at 10 advice firm websites, and found that each one mentioned the client and their needs within 48 words of their summary information about their business.

This is at odds, though, with the Financial Conduct Authority (FCA)’s continued dissatisfaction with firms’ inability to prioritise customer outcomes. (You can read more about the outcomes the FCA is looking for, and how you can achieve them, here.)

So what are the reasons for this inability to marry aims with reality?

A challenge for financial services

Quoted in the article, Mick McAteer, director of the Financial Inclusion Centre, cites the focus of the financial services sector as one potential reason for this.

‘In financial services the emphasis is too much on getting market share and distribution,’ said McAteer. ‘Client centricity seems to come second to that.’

He also believes that in a sector where customer satisfaction is intrinsically linked to financial return, ‘Firms will find it harder to demonstrate they can add value in an era of low returns.’

Smaller firms may find it harder

Also quoted in the article is Hayley North, managing director of London-based financial planner Rose and North. She claims that smaller firms may not have the resources to put on the ‘value add’ activities that larger businesses routinely offer, like seminars or briefings.

Although, as the article points out, the personal touch that smaller advisers can offer can go a long way to offsetting any of their limitations. As the article says, ‘Small firms have the personal touch large ones lack…they make a good impression on clients and build trust by going the extra mile: from a reserved parking space and fresh coffee to home visits, seminars and an office pet.’

How to embed a 'client first' culture

A pet may be a step too far for many firms. But there are things you can do today to put the emphasis on your customers.

1.  Your processes are central

The article says that ‘client focus comes down to the design of the business’s processes’.

You need processes – operational and commercial – that ensure compliance with the necessary regulations. Make sure your processes meet the FCA’s requirements and you will go a long way to delivering what your customers want.

2.  Put in place the right business structures

This means not getting overly hung up on one set of stakeholders; your shareholders are no more important than the regulator or your customers.  Arguably, if you put your customers’ needs first, shareholder and regulatory approval will naturally follow.

Life’s not quite this simple, of course – but put your customers at the centre of all you do and you’re more likely to achieve shareholder aims while staying on the right side of the FCA.

Make sure your financial promotions treat customers fairly and ensure you deliver solutions that meet the rules on suitability.

3.  Create the right culture

The article rightly points out that going above and beyond regulatory requirements ‘is a question of embedding a culture within a business’.

This can be harder in a larger firm than a smaller one – simply because the scale of the task is bigger. The firm may be more siloed, with less overall oversight of behaviours and actions.

Secrets of a client-focused culture

There are ways round this, of course. You can make it easier for your teams to take the right path, by putting in place processes that:

  • mandate approvals for financial promotions
  • make it easy to find pre-approved content for sales and marketing materials
  • make production and sign off easy, to prevent people taking shortcuts that might fall short of your standards
  • minimise the paperwork and manual admin required for compliant financial promotions, operations and record-keeping

The article concludes by saying that ‘The lesson seems to be that getting the right procedures in place and finding a way to embed a client-centric culture without drowning in bureaucracy will stand any firm in good stead to continually provide good outcomes for their clients’.

This is something we would wholeheartedly agree with. You can read more about how to create this customer-centric culture in our whitepaper, How to embed a compliance culture within your business. You can download a free copy here.

Nothing in this document should be treated as an authoritative statement of the law. Action should not be taken as a result of this document alone. We make no warranty and accept no responsibility for consequences arising from relying on this document.

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