Last month I agreed to put my head on the chopping block and give my general observations of Financial Brokers in Ireland today, my views formed by the work I’ve been fortunate to carry out with a great number of you over the last four years. So here goes…
A very resilient bunch of people
This is my overall sense of Financial Brokers and is the factor that has impressed me the most since 2011. At that stage many Financial Brokers were on their knees, as the market for personal financial advice and solutions had dried up almost completely. However most of you simply dug in, scaled back your businesses to a more sustainable size, re-examined your propositions and got out there meeting your existing and prospective clients. Thankfully in 2014 and again in 2015, many of you are now reaping the rewards of the effort put in during these tough years.
Financial Brokers do invest in their businesses
When I started out in 2011, if I had got a euro from every person who said to me that “brokers won’t pay for anything”, I’d be a richer man! The bottom line is that Financial Brokers are willing to invest in their businesses, where they see value in doing so. The days of only engaging with suppliers when a provider will foot the bill are long over. Yes, you are very discerning about when and with whom you engage, making sure that you can see a clear return for your investment. But you’re 100% right! This ensures suppliers (like me) are focused on the value we can bring to you, rather than simply pushing products and services at you. Is this any different to the work you do with your clients?
Many Financial Brokers are not great at communicating the value you add
You know somewhere in the back of your mind the value of what you do and know that you are delivering value to your clients. The problem for many of you is that your clients are just not seeing it. From my experience of working with many Financial Brokers, this stems from not taking the time to actually articulate what you do and the value that that you add, and as a result not actually documenting your proposition. As a result, there are lots of “chats” happening with prospective clients, instead of structured conversations with relevant marketing supports that set out your proposition in a compelling and engaging way.
Some Financial Brokers are still trying to be “all things to all men”
Having a clear target market makes your life so easy. You can then focus your client value proposition, your sales activities, your marketing messages and indeed your whole support infrastructure around meeting the needs of specific groups. But some only see the risks involved in this – narrow groups of people to target, missing broader opportunities etc. As a result, many Financial Brokers continue to try to appeal to everyone. And as a result, they don’t really connect with anyone. Yes, your target market must be big enough to sustain you. But if you then focus your efforts on them, you gain the opportunity of creating a real standout positioning for yourself.
Pricing is a major challenge
As more and more Financial Brokers move from transaction based pricing to advice based pricing models, the big question that you are confronted with is how much to charge. This first of all comes back to your actual proposition(s), then how good you are at actually communicating these to your clients. Even then, there is a certain amount of trial and error. Certainly I know from working with many Financial Brokers in this area (and from my own work), you need to initially work out sensible pricing levels and then keep them under review going forwards. For those Financial Brokers with well thought out propositions, experience suggests that they tend to initially set their pricing levels too low and end up reviewing them upwards as they gain more confidence in their pricing. And yes, in many or most cases, the fees are collected through the commission system.
These are some of the main observations that I have of Financial Brokers today. In the main, you are an enjoyable group of people to work with, challenging too because of your ambition to see your businesses thrive. And that’s what keeps it interesting for me.