Planners to behave like CFOs
Wednesday, 19 November 2008 12:35pm
Financial planners should move to a model where they act as a chief financial officer (CFO) for clients, managing relationships with other wealth management experts to cater to all the client's needs.
Martin Mulcare, Strategic Consulting and Training (SCAT) consultant, said planners should move away from providing just product or asset allocation advice to more holistic advice to clients, much like how CFO would work with a chief executive.
Speaking at an Institute of Actuaries of Australia meeting, Mulcare said this involves sourcing and managing relationships with other executives across areas such as insurance, which the planner is not confident in advising on.
"The CFO is active in managing all financial aspects like outsourcing to a tax expert. Instead of handing him or her a business card and a recommendation the adviser manages that relationship as well," he said.
"The adviser's role is being an expert at managing the client, understanding their financial needs. As needs come up, project managing those solutions acorss wills, trusts and life insurance."
However, Mulcare said transitioning to this advice model had pricing and technology implications. He said the would require a customer relationship management (CRM) type operation which some, but not all, planning technology providers can perform.
In addition, "price takers", those planners that are remunerated for their work through a product, would be forced to alter their business the most, he said.
"We may have to look at product design. We have to factor something in for the adviser [to compensate for their time managing extra relationships]," he said.
Michael Hobbs
