A conversation with an adviser recently about how to help clients see the value of Cashflow Modelling software prompted me to ask Mark Ferris, one of our Associate Consultants and himself a user of this software in his own advisory business, to explain how he gets clients to buy in to the (seemingly laborious) process of analysing their income and expenditure. Here’s what he had to say…
“When I talk to advisers about the benefits of using cash flow forecasting software, the most common objection they have is ‘my clients will never take the time to complete and return the expenditure questionnaire’ or I have the software but don’t use it very often because the clients won’t complete one.
My first response is normally how many clients haven’t returned a questionnaire, to which the answer is often, ‘I haven’t sent any out yet, I just know that they won’t complete it’. Therefore, the problem is often with the adviser’s mind-set, not the clients.
I also ask them how do you currently get the information, because after all, detailed knowledge of their expenditure is vital to making appropriate recommendations for a client?
If you’ve done a great fact find and shown the client what you are going to do for them and demonstrated how powerful the software is they will understand why it is important that this information is completed and returned.
What works for me is to emphasise why this information is so important. I tell them once I have the completed questionnaire I’m going to accurately forecast the future cost of their ideal lifestyle and be able to tell them if they have enough money or if they will run out. Secondly, I give them a date to return the questionnaire by (usually about 7-10 days), as this will focus their minds. This can then be followed up by a quick telephone call after a few days to remind them you are expecting it. This works in 90% of cases for me.
One possible barrier to getting the questionnaire returned may be the charge you are making for the financial plan. If it’s too big you may put the client off before they have experienced the benefits of the process. You need to be paid well and be profitable, but the client needs to see how you can help them before making a big commitment. This is an area we regularly help advisers to overcome.
Another reason you might not receive the questionnaire back is that the client isn’t committed to the process. It’s better to find out now before you’ve wasted any more of your valuable time. As Paul Etheridge would say, ‘once a messer, always a messer!’
You have to think, do I really want this client in my life? If the answer to that question is yes, because they look like your ideal kind of client that you can deal with very profitably, but they’re just very busy, then you have two options…..
1. Offer to send out one of your admin staff to help your client get the information together (if you’re a single person business then you will have to do it). Clients will appreciate the extra mile you are prepared to go to help them and if you send one of your staff, your time isn’t affected and you are on your way to a good relationship with a new ideal client.
2. Estimate the figures for them (initially at least to help them see the benefit of doing it more accurately) – after doing the fact find/discovery meeting, you already know a lot about them. You’ll know where they live, what their mortgage is, how may children they have, where and how often they go on holiday, what their interests and hobbies are etc.
You can estimate their expenditure numbers for each item based upon what you already know about them and your experience of other similar clients.
When using the software at the next meeting, upon reaching the expenditure section, you can tell the client that because they didn’t return the questionnaire, you have had to estimate the numbers. Then simply ask them to go through each item and amend those that they don’t think are accurate. This will enable you to have a good discussion about what they spend their money on and the clients will become even more engaged in the process, because you are spending even more time talking about them and what’s important to them.
The expenditure questionnaire is crucial because it is the foundation to building a comprehensive financial plan for the client that enables them to see the consequences of their current and future lifestyle.”
What are your tips for getting clients to return their expenditure questionnaire?