Start dating your clients

Financial advisers are realising that the value in their businesses is the relationships they have with clients, not just the skills they offer, says Philip M. Randall, managing partner of The Thorndyke Group.

Wednesday, August 9th 2017, 2:40PM

He was in New Zealand for this year's National Advisers' Conference. He spoke to the conference about the period of disruption that is under way, sparked by the growth of humanoid artificial intelligence.

"The key aspect of it is a prospective client - what are they looking for when they’re engaging a consultant of services? Three things: one is good judgement, the second one is skills to do what is needed, and the third is empathy.

"At this particular juncture, what is happening in terms of artificial intelligence - or the ‘robots’ or the ‘avatar’, however you want to talk about it or describe it - is that they can now, at the beck and call of the human, exercise good judgement, and they also have skills. But they have not been able – as of yet – to capture the ability to demonstrate empathy," he said.

By contrast, he said, human advisers could build a relationship based on trust.

"Twenty years ago, I was advocating a model of whole-person planning based on criticality of the relationship. I would say that now, practically every adviser would have heard that a hundred times. The clarion, or call of action, that I think is important in this particular conference is the question, 'So, what are you going to do about it?'"

Advisers would need to change their mindsets to open up to their clients about themselves ,as well, he said, which some advisers could find challenge.

"When I talk about relationships, I try to translate it for everyday people; you’re dating, for example! If you’re dating and you’re trying to build a relationship, the relationship that you’re trying to get to is one of intimacy.

"That means you need to be able to know the person well enough to meet their unexpressed needs. Right? Because everybody is going to try and meet the needs that they say they have. The differentiation in the marketplace will be such, that those who can create a relationship that’s intimate enough that 'I know what you need before you say it'."

He said few were doing that yet and it would limit hte number of clients an adviser could service.

"What is emerging in your culture here is this idea of fee-base, so they have time. The interaction and engagement is based on the fee, so they have time to develop that relationship. The model that I use in order to even create this discussion is old private banking," he said.

"Private banking was where you actually had a banker - although it wasn’t involved in banking as we know it today, but it was called a private banker. That person had a relationship with you and generations, in given families. And what did they do? Not only did they manage your money, as it were, but they also managed your relationship with your physician, managed your relationship with your children and their education, etc. They were always there supporting you."

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