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Rich advisers will get richer

Changes in the financial advice market will make rich advisers richer while the rest get poorer, says an American author and consultant to the industry.

Tuesday, November 12th 2013, 6:57AM

by Niko Kloeten

Matt Oechsli, founder of the Oechsli Institute, which coaches financial advisers, spoke at the TNP conference in Auckland last week, where he predicted a "bifurcation" in the industry.

"What you'll see is you'll have a small elite group of advisers who do tremendously well and make very good incomes.  Then you'll have the general population of advisers out there peddling financial products who haven't raised their game."

Oechsli, author of the book Building a Successful 21st Century Financial Practice: Attracting, Servicing and Retaining Affluent Clients, says the "product peddlers" will struggle in the new world of financial advice.

"That bifurcation is going to be cruel because they are not going to be making nearly as much money as they have been making in yesteryear."  


Relationship management of clients will become increasingly important; advisers will have to be skilled listeners "as professional as a highly skilled cardiologist".

But it will also be important to know how to attract affluent clients, Oechsli says.

He said many advisers did not do the right things to get a foothold in this segment of the market.

During a panel discussion on prospecting, he had some tips for advisers looking to connect with the wealthy.

He says research, including by his own company, had shown those consumers have a strong preference for word-of-mouth and did not trust advertising from most industries.  The preference for word-of-mouth has only increased in recent years. 

Those clients wanted "white glove service" and despite the rise of email and texting, they still preferred to meet in person he said.

"They respond to excellent service.  Our focus groups we run with affluent consumers show that if there's one area they want improved, it's personal communication. Face-to-face contact is the preferred medium of contact for up-scale clients."

The best way to meet those clients was to be introduced to friends of existing clients, Oechsli says.

However, he says many advisers did not know what to say when it came to meeting these people at events.

Advisers needed to be able to talk about what they did without making too much of an obvious sales pitch.

"The data is very clear: they don't like politicians and they don't like salespeople.  They're always being pitched to."

Niko Kloeten can be contacted at niko@goodreturns.co.nz

« [Weekly Wrap] Why don't Kiwis like advisers?IFA working on pro-bono offering »

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