Interviewing Sara Benwell about first impressions in financial advice

Author: Jérémy Bourhis

20th January 2021

Sara Benwell is a freelance financial journalist who has written about financial advice in publications from The Sun and Daily Mail to Pensions Age and Strategic Risk.

We spoke to her about our recent First Impressions report, looking at how financial advisors make an impact on potential clients before their first meeting.

What’s your initial reaction to the findings?

While some areas of the financial services industry have modernized, financial advice hasn’t done and seems locked in the past.

Historically, there might have been good reasons for that because statistically, people who seek financial advice are likely to be older. However, I think that’s an argument that would have been fair enough 15 years ago and I don’t think it is now. I think most financial advisors would say that high up their priority list is to target more young people in their thirties and forties.

There’s an over-reliance on face to face. There’s not enough technology. If you look at someone like Nutmeg, they’ve got their customer journey sorted. Even though they’re doing investment, which is extremely complex, they’ve managed to make that so simple and customer friendly.

If I’m a person thinking about getting financial advice for the first time, and I go to a financial advisor’s website, I’m probably targeting one of their key services, triggered by a life event – for instance, seeking retirement planning at the age of 55.

So why aren’t those services signposted across the top? Wingate’s site feels as if it is most geared towards consumers, with case studies, clear information about services and a focus on professional excellence.

Most of the other websites were confusing, hard to navigate and drenched in jargon more suited to a B2B market.

What do you think about the way the current perception of financial advice affects peoples’ decisions?

I think financial advice is incredibly important. I’ve written umpteen articles about why financial advice can help people to manage and grow their assets and make strategic financial decisions.

For instance, one of my regular arguments is the significant impacts taking advice can have on pension portfolios where the cost is usually far outweighed by the benefits.

But the fact is that most people think that it’s expensive. They think that it’s for rich people. They think of the big scandals that have happened over the years, so they’re mistrustful of the industry as a whole.

And then, even if they overcome all of those barriers, they come to a website that tells them virtually nothing.

I think if you take the trust barrier as the key thing you’ve got to overcome, then advisers that want to grow their customer must:

  • Be upfront about what your costs are and how you charge.
  • Make a big point of your independence and back this up with facts and information.
  • Have good, obvious, upfront case studies that show the value of advice to real people and help build that trust.

How do you see the relationship to new technology entering the market?

The question that financial advisors need to ask themselves is: are we going to be the people who modernize, who make ourselves friendly and accessible, who explain what’s going on, who do all of this, or is a tech company going to come in and try to do it with things like robo-advisors?

Tech companies have identified that financial services are multi-billion pound industries and have come up with solutions to try and carve out some of this revenue. For instance, robo-advice, pensions consolidators such as Pension Bee and challenger banks such as Starling and Monzo. If financial advisors don’t embrace technology, they will be next.

Admittedly this might be a referral-heavy industry. But experience still matters – if somebody recommended three financial advisors to me, the firm that wins my business will be the one with the best customer journey. Those firms with murky websites, poor customer contact firms or long response times must be losing clients.

If it’s not easy to book appointments, that’s crazy. As is that over-reliance on: “we’re a person to person company, therefore we don’t want to use technology.” They want one of their financial advisors to email you, but hang on a minute, they’ve got a huge group of IFAs (Independent Financial Advisors), all with different specialisms, how can they select the right one without understanding my needs and drivers. It seems obvious that a journey where you select what you are looking for and then are put in touch with the right adviser is key.

How do you feel changing demographics is having an impact here?

I’d put serious money on the fact that the average peak age for seeking financial advice is somewhere around 50 – between maybe 45 and 55, because that’s when peoples’ incomes peak.

In maybe five year’s time, that demographic is going to be full of millennials. So think about that. Does your user experience have anything that would appeal to that audience and make them trust you with their money?

Do I trust a company that doesn’t embrace technology to always be offering me the best solutions? More critically, if a firm can’t get customer journeys right – will I trust them to use technology in their own services to have the best full grasp of what’s available in the market?

If I want to invest, I need to believe that an organisation is sophisticated enough to use basic technology to evaluate all the options available to me.

Download our free report for more information on the first impressions leading UK financial advisors make on their prospects.

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Jérémy Bourhis

Date: 20th January 2021 | Category: Finance