The way advice/planning firms market themselves has changed considerably over the past 30 years. In this article, we’re going to consider whether regulatory intervention or other factors have been the main driver of that change.
Let’s start by heading back to 1995 when I began my career in financial services.
Like so many, I was a ‘tied agent’, with three products to sell; a PEP (hands up if you remember those!), a pension and a protection policy. For me and my fellow ‘advisers’, marketing was almost exclusively focused on generating referrals from existing clients. We looked on jealously at other organisations who advertised in printed publications, had stands at events and went networking.
Towards the end of the 90s, things changed. I recall thinking we were at the cutting edge of marketing when we bought a list of prospects, sent a promotional mailer through the post and then paid someone to make sales calls. It worked, even if it wasn’t very original.
Fast forward nearly 30 years and things have changed beyond all recognition.
Firms should still prioritise referrals and recommendations from existing clients, but we live in a digital world which means firms can now harness the power of:
- The online world
- Social media
Driving change
From commission disclosure to Treating Customers Fairly, the Retail Distribution Review to the Consumer Duty, a plethora of legislation has been imposed on advice and planning firms over the past 30 years.
In various ways, each of those initiatives has made it more important for advisers/planners to demonstrate the value of working with them. However, the overall impact they’ve had on how firms market themselves is tiny compared to:
- The adoption of email as a key communication method
- The way the internet, and in particular Google, is now central to our daily lives
- The widespread adoption of Facebook, leading to the launch of other social media platforms
It’s clear that over the past 30 years, the key driver of change have not been regulatory intervention.
The likes of Tim Berners-Lee, Larry Page, Sergey Brin, Jack Dorsey and Mark Zuckerberg have been far greater agents of change than the PIA, FSA or the FCA. And as the digital revolution led by these pioneers is well advanced, we need to remember that we’re only at the start of the AI revolution, which will inevitably lead to seismic change, even if it’s not possible to identify with certainty what that might look like.
However, like buses, two pieces of regulatory intervention have come along at once, both of which will change how advisers/planners market themselves more than any previous initiative.
Firstly, there are signs that the consumer duty has forced many firms to change their charging structure. St James’ Place has made high-profile changes, while research from Royal London and The Lang Cat shows 37 per cent of advice firms have changed their fee structure after completing the consumer duty fair value exercise.
That will inevitably shine a brighter spotlight on client fees, which in turn creates a need for advisers/planners to do more to demonstrate the value they add.
Furthermore, the consumer duty means many advisers/planners are undoubtedly upping their game when it comes to client communications. That’s a good thing as not only will it help to satisfy their new obligations, but also because research shows a link between the increasing touchpoints and client advocacy.
