Adviser Stories: I do 'fire drills' with my clients

28 November 2018 | Practice Management


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Advisor's typogragphy visual

I always found finance interesting. The Sunday Times used to have a stock picking game, which I really enjoyed. A career in financial services also promised significant revenue at that time – an appealing prospect for a new graduate. Working for various banks and financial advisers in the 1990s and 2000s, I discovered a talent for finding clients.

By the late 2000s, I'd established myself as an adviser. But there were a few things about the industry that didn't sit well with me. I knew some companies encouraged advisers to push products that were totally wrong for clients or told their advisers to take as much commission as they could, even during the financial crisis.

Too often, advisers were more interested in commission that they received from selling a product rather than doing what was best for the client.I didn't think that was right.

So when I set up my own advisory business, Blue Wealth, in 2009, I made sure it was fee-based – something that was totally alien at that time.

For me, it's simple. Market volatility is something to be embraced. And in my opinion, it's not something that any adviser can control. So why would you connect the revenue that you receive from a client for a service you provide to something you can't control? We still have the same amount of work to do – possibly more if the client needs reassuring. But at that time, fixed fees were unheard of. Even the people I worked with were against it! But for clients, it was a differentiator. It started conversations. They liked the transparency of it. Clients sometimes ask, how much return can you get me? To that I say, how much do you need? What do you need your money to do for you? Something I learnt from Paul Armson of Inspiring Advisers was that you need to identify, in detail, what your desired lifestyle looks like and then establish the cost of your current and future lifestyle. I linked Paul's bucket diagram to their present and future cash flows and it blew them away. They had never seen their finances this way before. When I take a client through the diagram, I'm really giving them a holistic service, not just constructing them a portfolio.

Behavioural coaching also plays a big part in what I do. I like to do fire drills with my clients. I take them through certain scenarios – a market fall, a death in the family – and we practise their response. It's incredibly difficult to make good decisions at stressful times, but getting people to stop doing silly things is half the battle.

Of course, none of this is very effective if you don't have good relationships with clients. I think of my clients as families, rather than clients. It's really important to me that I get to know a client's whole family. When I go round to my clients' houses, I encourage the younger generations to sit in on the meetings.

Illustration of Raj Shah showing a family picture

There's an intimacy in our relationships with clients. There aren't many professions that can truly say that. People let us into their homes. And that's really important – going to someone's home really helps you understand them. You might see photos of the family on holiday or fresh flowers on the mantelpiece. So if I see that the family has the ability to spend more, I might suggest they take a holiday or treat themselves more often.

As an adviser, I often work closely with the family's accountant and lawyer. As knowledgeable as they are, I find that I often have to help them get up to speed with the family dynamics. Getting to know the client and knowing as much as possible about what makes them tick is a form of CPD in itself – it's what helps you serve clients better.

Raj Shah, Blue Wealth Capital

Vanguard’s Adviser Stories are a series exploring adviser-client relationships.


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The opinions expressed are those of the individual author and may not be representative of Vanguard Asset Management, Limited.

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