Where Are We as a Lifestyle Financial Planners Going?

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Posted On 2020-09-30 Author: Dirk Groeneveld

When CR dropped us to level 2 a few weeks ago, I rushed to the SANPARKS website and managed to book Lynda and I some time in the bush - Kruger to be exact! As you know we love being in nature, and not being able to get our “fix” for 6 months has been testing, this 2-week break was just what we needed.

I can share with you that it took me almost 10 days to feel relaxed, which showed me how much internal stress we have absorbed since lockdown started. The world we live in has changed so much this year, and it was good to be able to just sit and think about where we are and what the future might hold for us. With this in mind, I thought I might share some of my thoughts, where I see the Financial Planning industry and our business, Client Care, moving into the future.

The industry itself is busy revolutionising, moving from a transactional to a relational industry. I have been aware of this for a long time, being one of the first businesses in the country - 20 years ago - to move and embrace what we call Lifestyle Financial Planning (LFP). This is indeed the way of the future and embraced by many planning businesses around the world. The big difference is that our focus is always on the person, what they want out of life, and not how much money, they have to invest (the money comes after the person). 

As the LFP approach is slowly becoming the norm in our industry, we need to make sure that, as a business, we continue to look for ways to give you, our client, more and more “real” value and not just try to be different from the rest. There are various areas, where we anticipate change and we are looking at those areas to reinvent, redesign, and innovate to remain relevant and great at what we do and love!

What we do for you as Lifestyle Financial Planners

A few years ago, we sat down as a business to understand our “Why”. Why is it that we come to work? What gets us out of bed in the morning? What is our purpose? The result we came to is that “we love and are proud of the work we do, making a difference in people’s lives”. We take this very seriously and this drives the ethos of how we work every day. Fundamentally, what we do is help you plan the life you want to live. A plan will always change, however having no plan, leads to disaster and so continuously reviewing your plan is vital.

Coaching & Behavioural Finance

We know that we cannot control the markets or other external forces, the one thing that we can however control, and that makes a huge difference to our lives is our behaviour. Behavioural finance has been the subject of many studies over the last few years and is the one area where we can add the most value to our clients. Helping our clients and preventing them from making any bad decisions when emotions run high. Being their accountability coach and partner, helping clients to remain on track and “stick” to their plan is the single most important part of what we do.

Last year, I went on a 10-month coaching course through Allan Gray and this year both Alex and I are doing something similar through Old Mutual Wealth, which will take us 12 months to complete.

New Tools

We are constantly looking to the future and embracing new technologies to improve and complement our existing planning tools to enhance your client experience. The purpose of these tools is to help and empower you, to have additional clarity and better understanding of your finances and financial plan. To this end, we are introducing the Assetmap tool, which visually represents a household’s finances in a clear graphical layout. 

We are also starting to use Return On Life (ROL) tools, which helps us understand how our clients can get the best return on life with the money they have. Click here to see your own ROL index.

Online Client Portal

We understand the importance of digital access to our personal information 24/7/365, be it on our smart phones, laptops, or tablets. Unfortunately, currently there are no great financial planning client portals available in SA, compared to what is available elsewhere in the world. I have been actively engaging with an IT business in the UK, Intelliflo, to launch their product in SA. Which will change the way we work with clients. It is a CRM system, which integrates with any other tools and has a client portal that will allow 24-hour access to your updated personal info. It also has the functionality for you to store important documents in a safe and secure online location. They launched in Australia in 2019 and we are hoping they will enter the SA market in the next 18 months.

Fees

We came from a world of large upfront-undisclosed commission, 20 years ago we transitioned to annual fees based on the assets we look after. This is a far “fairer” way of charging our clients but is also not perfect. It has the unintended consequence of clients with more money, paying more for our services than clients with less assets under our advice. We are redesigning our fee model, to incorporate a sliding scale as fees grow, to arrest this situation; we are even considering an overall cap in future, for clients with large amounts invested with us.

In countries like Australia and the UK, some planners have moved to fixed fee models where their clients pay a predetermined amount annually for the services they require. This seems like a very fair way to operate and is something we are looking into as an option for the future. Bear in mind, that while the 1% fee model, can mean some clients overpay, it also means that many clients are not paying us enough for what we do for them, so one client’s solution becomes another’s challenge. 

As you know, we believe in the concept of a “lifetime relationship” with our clients. This means, we know that there will be times when we do a lot of work for them and times when we do not. There are also times when they have a lot invested through us and other times when they are depleting their monies. The real value in having a trusted relationship is that we are there for you through your life’s transitions and when unplanned events, both good and bad, occur.

Fees are important to our clients, to the extent that they receive a fair exchange of value for monies paid. To us, being able to run a sustainable and profitable business and deliver our consistent client experience.

Growing The Business

For many years I have grappled with the idea of growing the business or staying small - there are pros and cons to both. While being away, over the last 2 weeks. I managed to finish one book, The Infinite Game by Simon Sinek, a great read for everyone. The learnings from the book and the experiences of the last 6 months have made me realise, that the business can grow without losing the values and intimacy that comes with a small business. In fact, I have realised that with the right people on the team, we can work with, and help many more clients out there, to live their best life. 

How this will work I am not yet sure - but watch this space.

I know this communication is a lot longer than what we would normally send out, so thank you for reading to the end. Thank you for trusting Client Care with your finances and your life, we honestly understand the responsibility we have been given by you and will continue to get better.

Stay safe,
Dirk

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