Coaching Financial Advisors for Client Relationship Driven, Life Time Value Creation

Dheeraj Prasad: Good morning. Good afternoon. Good evening to all the viewers back on the channel with two power-packed guests on my show today. I have Dave Nel, who is the national sales enablement head at Investec based out of South Africa. Hi, Dave, how are you doing today?

Dave Nel: I am good. Thank you from beautiful sunny Cape Town. It's wonderful. What are we on tonight? Wednesday morning, right?

Dheeraj Prasad: Yes, absolutely. And my second guest today is Louis, who is the director at WealthUp. And he brings a very interesting perspective as a certified financial planner and will give us a lot of rich experience in terms of his coaching and the way that he enables his clients through education. So, welcome to the show, Louis.

Louis van der Merwe: Thank you so much for having me. Dheeraj. Absolutely.

Dheeraj Prasad: So, you know, this is so very interesting. And I thought as much when I was talking to Dave that it will be great to get two different spectrums of the insights, primarily, with Dave coming in with his great background, still working at Investec in terms of how he's enabling financial advisors, you know, within Investec itself, and Louis, for you to actually get into the skin of financial advisor. So how do you really look at the life in a day of a financial advisor? And that's precisely what Dave and I spoke about. And I think it'd be great to get this dual perspective, you know, from both of you today, let me start off by saying that the whole wealth management industry is a big one, and I was reading up a Boston Consulting number in terms of dimensionalizing, what this industry actually is worth, and it came up to a mind-boggling number of about $89 trillion worth of what they call this as the overall assets that, you know, Wealth managers deal with. And this is a growing industry. So I'd love to really start off by asking Dave, how do you see this industry-shaping up specifically during the current times on what are the opportunities? And what are the key problems that you see right now for financial advisors, making red really big and helping clients in this particular industry?

Dave Nel: That's a lot of questions. There. Yeah, there's, it's an interesting space. And I'm sure Louis would probably say the same. And add, I guess the first thing is that the actual industry itself is definitely ripe for disruption. There's so many self-help, robo advisor, self-directed client options that are available. And I think a lot of people are trying to make sense of where do I go for what information. It’s actually almost overwhelming. I always say it's like drinking from a fire hydrant. Because there's so much information out there. And, and it feels like almost everyone is an expert, and they talk with such confidence, right. And so I think that's the first thing is that clients are very informed. At the same time, they're looking for people to help them make sense of all the information that's out there. It's also an incredibly price-sensitive space at the moment because of the digitization of so many things and robo advisors and AI and whatever it might be. And then I think probably for me the last one is the world has gotten really small in the last two years. And access to global investments used to be like only for the incredibly wealthy who were really really connected and had the right advisor who knew exactly where to go. But now it doesn't matter where in the world you are, you can invest in anything, which again means just so many options, and quite daunting, I think for the clients that are out there. And also, for those wealth managers and financial advisors who've been in the industry for many, many years, and they have to figure out how to navigate this. Believe me. I don't know what you think if there's anything extra there.

Louis van der Merwe: Yeah, Dheeraj, that's a great question. You mentioned Boston Consulting Group and they just released a paper on client-led advice and that kind of summarizes The whole shift away from financial products to the person, right, and the global pandemic has really just accelerated that way, in order to try to stay relevant financial advisors and wealth managers have moved to a kind of a more personal relationship, as opposed to just distributing financial products, which is being commoditized by technology. And so you see this wave of new skills, and you know, they talk about the soft skills, which I would argue might be the hardest skills to learn, but it's your more personal skills that starting to, you know, play art, which is a very interesting trend when you mix it with finances.

Dheeraj Prasad: Absolutely. And, you know, this leads so very well to my follow-up question for you, Louis. What are the specific coaching needs that you see right now for financial advisors? In the current scenario?

Louis van der Merwe: That's a great question. So the coaching needs for financial advisors, I would almost turn around to say, you know, what do the end client require, and then let's work our way back to build the skills to enable them. And so with clients that we see, you know, on average, only 20% of the clients are ready to make a change. And that could be a change in their financial lives or a change in their portfolio. Yet, we often jump into the kind of, okay, you need to change this investment holding or this product. And so we see financial planners and wealth management managers starting to slow down the process to say, okay, let's actually find out, you know, what is the true reason for this change? Are you preparing in the right way to ultimately then get to the change, or at the same time, you know, we're speeding up, but we're also slowing down too, I think, create a more robust process and ultimately, to deliver more value to our clients.

Dheeraj Prasad: Absolutely. And one of the things which also intrigues me a lot is, we are expecting the financial advisors, as clients, facing people to be ready in the new format of digital. But other clients themselves are ready for the change. And maybe that's a question, Dave, that you could take a stab at first and see as to what shifts are the buyers making in the digital format? What expectations do they have from financial advisors? And are they ready?

Dave Nel: Yeah, absolutely. You know, someone gave me such a great analogy the other day, and they were saying, if you go back 10 years, maybe even five years and someone was picking a financial adviser or wealth manager, often what they would do is they would look at the obvious competitors in the space and compare them. So you know, you may look at the top four in your country or region and say, Well, which one and what are the returns look like? But what's interesting is that consumers or clients, reference points of what good looks like, have shifted. It’s no longer just your obvious competitors. They're now saying, Well, hold on a minute. You know, Uber can deliver it to me in 10 minutes. Why can't you and you're like we're not Uber, we're a financial institution? You know, I can pay with Bitcoin on you know, whatever, Alibaba, so why can't I pay my fees in Bitcoin? Well, but we're not Alibaba. We’re a financial institution. So I think what you find is that the clients actually are more ready often than the actual institution and the actual organization itself because they're so well trained. You think back to 18 months ago, we were all having Zoom dinners with friends around the world. And we very quickly became ofay and okay with it, but it's actually your value creators, your salespeople, who have to figure out how to adjust their processes to match where the clients are. So I don't think clients have an issue, maybe a little bit in the Wealth Management space. You find that you've got the older generation. But let me tell you, the older generation has adapted very quickly to digital and online.

Dheeraj Prasad: Absolutely. So let me ask Louis from the perspective of a financial advisor, it's a bit of business which is very, very personal and I was also very intrigued by knowing that financial advisors know more about the individual the client more than so their own family members. So the interesting thing here was that probably you know, the spouse would not be doing as much as what we, the financial advisors, should be knowing because it's such a personalized relationship. My question to you, Louis, is that in the digital format, how can they still build trust, which somebody would bet their future income and their wealth on that individual to go out and invest? And take the advice? Are they just coming in from the financial advice?

Louis van der Merwe: Dheeraj, I think the key point that you mentioned is building trust. But we have to say, Well, what happens before we build trust? And actually, this is the structure, you know, know, like, and trust. So I would start with saying, Well, is there a brand awareness, you know, do people know about this financial advisor that they'll be engaging in, and then from that, they'll filter out to the people that actually like this person, because it is a really personal relationship, you get to share a lot of intimate details. So only after those two do you get dressed. And in a world where you are constantly connected to your clients, I would argue that the Trust has actually just accelerated. But what you have to remove from that equation is self-interest. So trust really disappears as soon as there's the self-interest of the person who may be distributing a product or not acting in the client’s best interest. So this idea of acting as a fiduciary, which in some countries have been legislated, I think is really key to building a trusting relationship. And then just, you know, constantly communicating with your clients. Because that is the only way to strengthen a relationship is actually to have meaningful conversations, not just talk about, you know, the weather or how things are going actually, you know, spend the time to get to know that person, and then the trust will form over time.

Dheeraj Prasad: Yeah, very, very well said, Louis. Absolutely. And how does this really translate in the typical life of a day of a financial advisor, and let's talk a little bit more in terms of, you know, one of the challenges that they really go through, and how have they been doing to build that level of trust, you know, with their clients

Louis van der Merwe: I have been reading a book by Cal Newport, and he talks about the hyperactive hive mind. And so that is like, almost being like a bee just moving from one point to the other. So, you know, that might not be the most productive way of spending your time. But if your key role is to build trust and to help your clients to make complex decisions, you know, almost acting as a thinking partner, then I would say you have to structure your day around the being available to your top clients. And also knowing what not to do, you know, filtering out the things that are not adding value, the tasks that can be outsourced to technology, the things that are that a robot would be much better doing, right, we can use algorithms, we can use these technologies in our businesses. So actually, technologies opened up our time to actually be able to spend more time with clients. And now that doesn't mean that you know, within our business, we can serve each 600 clients, we have a very limited client base, because we think that the quality of the relationship is key. But there's many different types of advisor relationships, your relationship might only be in a product distribution, or it might be for a very specific niche component within your financial planning. So I would say it is probably a little bit too hyperactive hive mind, but it can also be really structured.

Dheeraj Prasad: Absolutely.

Dave Nel: Dheeraj, I wanted to just add something there, sorry. The thing that I think we sometimes forget, this might sound surprising to the listeners, but financial advisors also just people and they're not immune to what has happened in the last two years in the world. So we can look at quite a lot of their worlds certainly is dealing with clients and the buisiness and the craziness of work. But there's also a massive other part that says there's a lot going on in their personal lives. You know, there's a lot happening for them with their families. And I think a lot of focus at the moment is how do you also help and support the whole person in terms of financial advisors, and not just enabling them with sales skills and you know, how to build trust with clients and how to present digitally, all of those things are very important. But the end of the day, if the person who's delivering all of the value is not in the right mindset in the right place, then you're going nowhere. So that's a big area at the moment.

Dheeraj Prasad: That says that's a great point, Dave and it's so interesting. I was just reading about this as well that financial advisors, great financial advisors, take care of themselves in their lives first before they actually take care of the lives of their clients. So, you know, extremely well said, Dave, and I think that’s really, you know, matters a lot. Primarily from a conversation standpoint, what specific technologies that you think, in the digital world would really help to help them to build better conversations and relationships? Are there any examples that you have seen, which financial advisors are saying? Maybe, Louis, you could take the first stab at it. And suggestive, there's something which is currently being used.

Louis van der Merwe: Sure, I think this is something that doesn't have to be over-engineered. So the dilemma that you often have is that you need to communicate to the client based on the platform that they're most comfortable with. But at the same time, it has to be compliant and integrate with your systems and, you know, be safe and secure. So we see a lot of businesses engage in WhatsApp for business, specifically in South Africa, just purely because it has such a massive user base. And so that's meant that clients could engage in an instant messaging service without necessarily expecting an immediate response. There's always a history of all the conversations, and you can pause over those conversations. So I think it really speeds up communication, you know, people would send you an email, and they'll be okay with you maybe replying in a day. But if you don't reply, then they start messaging you on instant messenger. So it's kind of, Hey, we just want to make sure that, you know, the client that has the highest requests, you know, gets the priority. So I think it's a challenge to manage the incoming communication, but also at the same time making the client feel that, you know, they're important to your business, and that they're valued, and that they get the speed and the trust that comes with that.

Dheeraj Prasad: Yeah, absolutely. Dave, any thoughts that you have in terms of how technology is like social, could be a great way to acknowledge some special events that clients have gone through or any other forms of technologies that have been used.

Dave Nel: Dheeraj, for me, tech should always be an enabler. And you need to just first pause and say, What is the thing we're trying to enable, or help or get better with, and because there are so many shiny toys out there that you can get involved with, that's going to cost you a lot of money and is going to become white elephants in your business? Because you didn't think through? What does it actually enable? I think that I'm seeing a lot of people just leverage LinkedIn to communicate with their clients and potential clients. Of course, with GDPR and all of those kinds of new legislations landing that has shifted what you can and can't do. But I think we're starting to figure out what we can do there. But for me, the real shift is probably more on the coaching side of things. And the ability now, especially with a lot of people working remotely, no longer close to their coaches or sitting right next to their leaders. We're not going to meetings with your coaches. So things like, you know, Gong, chorus, there's some really great AI tools out there that can help with coaching. And it's really just like, always think of an Olympic athlete watching a video of themselves, we can now do that in a really slick way for our value creators or our salespeople. But again, you can invest a lot of money in those things. And if it's not solving something or enabling something in your business, you're just going to have a lovely shiny tool that no one uses.

Dheeraj Prasad: Absolutely, I like the analogy of the athletic side and in sports, etc. So Louis, do you feel something, which is what Dave alluded to, in terms of the role of technology, in coaching and how human-centered coaching can be truly blended with tools and technology that can really add value to financial advisors.

Louis van der Merwe: Yeah, thank you, Dheeraj. So what we've seen is almost this full shift grind. At the beginning, it was people just jumping on any type of technology thinking that it's the holy grail, it's going to fix their business, it's going to fix the processes, they wouldn't have to hire more people. And it's gone full circle to something which is a lot more simplified in terms of engaging with customers and with clients. And there's a term called Simple reach which basically just means that, no, it doesn't take away the richness of the conversation. But the technology becomes almost invisible. So it really supports the way the financial advisor would be engaging with employees or with the client. And the coaching element makes it so much easier when you don't have the technology, you know, bumping heads within that conversation. And so we're quite excited to see tools like asset map come out, where it really organizes, you know, the client's financial household information, but it doesn't get in the way of the conversation. And I think it's a piece of the market that will just continue to grow.

Dheeraj Prasad Absolutely. Louis, thank you so much. It's been a truly engaging conversation with you and Dave. If the audience of our podcast wants to reach out to you, what would be the best way to do so.

Louis van der Merwe: Thanks, Dheeraj. The best is to find me on LinkedIn. So you can just search for my name Louis van der Merwe, which might be a little bit more difficult if you're not from South Africa, but you'll find me and you're welcome to send me a message or jump onto my website from there.

Dheeraj Prasad Awesome. Thank you so much once again, and I look forward to catching up with you soon. Thank you.