Finding New People

Once it’s all done – you will still need to find new clients. Whether you’ve slogged your guts out over four years to become a CFP or sold your soul to a QFE it won’t matter. You will have a disclosure document and financial plans of a thickness that can stop reasonably large caliber projectiles. But none of it will matter if you can’t market yourself, because the heart of this business has always been and will always be the ability to find new clients. What’s more, you’ll need new ways of doing so. 

Peter Drucker said that the business has only two really essential functions – Marketing and Innovation. All the rest must be done, but just these two create the vital difference between one business and the next. What’s more they make the biggest difference between the success enjoyed by those businesses.

The main task in all forms of financial advice – and especially insurance broking – is finding new clients. Whatever the starry eyed spreadsheets say, even businesses with high recurring revenue need to grow, and even one which is already large will lose clients, and need to have them replaced. That’s proof of the need for marketing. 

The most successful methods of attracting people in large numbers to products over the last few years have few lessons for us today. KiwiSaver is a success because the Government has used a bit of a stick and plenty of carrots. We generally lack the ability to compel employers to give us new clients, and we labour under the greater discipline of needing to make money. The examples of the rush into leveraged property and finance company bonds is so discredited that we know we have to look elsewhere. So that’s proof of Drucker’s requirement to innovate. 

Finding them will have been made no easier by the process of education, by the promotion of complaints schemes, or by the presence of banks and ‘wealth management’ businesses that are able to offer guarantees of compliance from manufacture through to product sale. In fact it will have been made harder. Potential clients will long remember how the market, and their last financial adviser, treated them. But most of the financial advisers I meet like working for themselves, but do not understand that the greatest threat to their independence is not, perhaps, QFEs, but it’s their own inability to grasp the marketing nettle. 

The masters of financial marketing will employ many financial advisers – perhaps you won’t mind being one of them. However, the master of financial planning, without skills in marketing or the resources to afford them, may go the way of Betamax video – technically superior, but marginalized and ultimately extinct. 

The great danger is that you will spend the next 12 months working to comply at the exclusion of developing your marketing capability. If that’s the case, then compliance could well push you right out of business. On the other hand, if you adopt an approach which says you do only the minimum required to comply and push all the other available development resources (time and money) in the direction of marketing – well… the picture could be very different. The real challenge for the coming year is to learn to be a better marketer of what you do than you are a doer of what you do.

More of what you have done before simply won’t work. That’s partly because so many of the past products and approaches have been discredited by the global financial crisis. It’s also because you’re probably already working 40 hours a week and doing most of the basics right. It’s what you change that is going to count.

Although I can offer you no specific prescriptions for your new marketing plan, there are two general areas you need to examine:

• The first is to consider the new environment. New products on which people will want advice. New attitudes shaped by the recent financial events in their lives. New tax and regulatory structures – focusing on the opportunities they create rather than the compliance load. New economic conditions which are encouraging saving and a reduction in leverage. Change is a catalyst for advice seeking – so what changes are being made by people in your target market? How can you reach them at the times when they will be seeking help?

• The second is to consider the sources of innovation, to do that I return to Drucker’s classic advice. He suggested that you watch for the following opportunities: the unexpected success, an incongruity between how you think things should work and how they apparently are, innovation based on new processes, changes to the structure of our industry (no shortage there), demographic shifts, changes in perception or mood and new knowledge.
The great thing about doing this is that it will be so much more fun than worrying about all that compliance stuff – most of which you can do nothing about right now. It will also be more useful.

Back to Recent Articles