Reigning AFA Adviser of the Year, Eleanor Dartnall, has developed a unique and highly-specialised approach towards her responsibilities as a financial adviser. She has developed, and continues to refine, a very different way of packaging and delivering value for her clients.
Eleanor is keeping a diary to record her progress throughout her 12 months as the AFA Adviser of the Year, and we have the privilege of being able to publish extracts from her diary as the year progresses.
In this first compilation, we’ve documented some of Eleanor’s initial thoughts about education, financial literacy and developing new client education and engagement processes…
Client education
December 2014
… accepting the nomination [for AFA Adviser of the Year] has inspired me to put a spotlight on every process we undertake in our office.
Over the past four months we’ve conducted extensive testing with clients on how they felt about our first interviews, the readability of their Statements of Advice, and their experience of the implementation phase of their new journey. How we value and enunciate our service offering to clients, both up-front and on an ongoing basis, needs to meet with what the client expects from our service and, from a client’s perspective, more importantly, whether our strategies will achieve their personal goals in the time frame set.
I believe it is a crucial part of our best interests duty to educate our clients about investing, and the risk of investing, before we recommend new strategies or new investments and before we ask them to consent to our recommendations. While education has been an integral part of our value-add at Dartnall Advisers since our inception, we have now formulated a dedicated, up-front education meeting with each incoming client.
Today, we ensure the client is first equipped with new knowledge, empowering them to participate fully in the construction of their own investment portfolio
I set aside our existing guidelines to focus on the fact that every client sets out on our joint journey armed with different knowledge. A real issue associated with this is that components of the advice document specific to the individual client tend to be overshadowed by the necessity of including a great deal of material relating to compliance.
We decided we needed:
- More introductory meetings
- A formal framework for our education process
- A clearer, simpler advice document, and
- Above all else, we needed each client to understand our advice and to have the ability to give us informed consent for that advice
So began a new and exciting phase in our small business. Today, we ensure the client is first equipped with new knowledge, empowering them to participate fully in the construction of their own investment portfolio. I can’t emphasise enough how rewarding it is to form a trusting relationship in this way, with the result that the client is absolutely engaged, and, jointly with the adviser, accepts the responsibility for building a portfolio of assets…
[On her motivation as AFA Adviser of the Year] … I want to get my story across, I want the way we deliver advice in my industry to change, and above all else I want other advisers to understand the responsibility they have to educate their clients both in the initial engagement and throughout their journey together.
Financial literacy
January 2015
My task over the past couple of weeks has been to source and read anything I can find on financial literacy…
My initial research has shown me that while there is a focus on financial literacy both in Australia and OECD countries, the solutions offered do not include the much needed consumer education as it relates to investing…
The Dartnall ‘education piece’ now needs to be fine-tuned to decide whether this needs to be:
- A face to face ‘session’ with the new client; or
- Available as a YouTube option; or
- Broken down into small bites to be read or listened to; or
- Animated
Initial trials with new clients show that the education journey is part of the engagement process. Important in the education process is the new client body language. Often too unsure of their knowledge to ask vital questions, the clients’ body language expresses their lack of understanding very clearly. This is not picked up if the education is delivered via YouTube or video clips.
What we do know at this point is that the time spent on education is vital. Will I get buy-in from all advisers? No I won’t. Many will see this is a cost to their business bottom line and will find the additional hour or so (needed to ensure the client has sufficient understanding) greater than they are prepared to expend.
I accept that buy-in may only be through ‘train-the-trainer’ sessions and by demonstrating the results of this education process…
One of the weak areas in our industry at the moment is the scant attention given to estate planning. This should be a subject at the fore of any first interview and yet our education process offers very little that we can add to our knowledge on this topic…
Initial trials with new clients show that the education journey is part of the engagement process
I provide estate planning training sessions several times a year. The average adviser attending is concerned about addressing the topic of estate planning with their client, largely due to the possible emotional issues that arise and because they are not comfortable reading a will. If I can only encourage young advisers to learn more about succession planning and give this greater focus I will have done, in part, what I set out to do.
Developing a new client education process
February 2015
The pressure is building this month. With roadshows and interviews filling my diary, I find myself running from first interviews to recording file notes to white-boarding strategies. While I love this new-client engagement and the need to find solutions, I normally do prefer to do it with less intensity.
The teaching component of our on-boarding process, however, is pure joy; there’s nothing I savour more than watching these new investors learn and take control of the decision-making.
Just as a quick reminder so you know what I’m talking about, our new client process is:
- The all-important first interview, where I do the learning. Each new client is different, with a unique history and their own goals, both lifestyle and financial. At this point I simply listen to what they want. We get to know and trust one another; I explain our services, our fees, and the path to giving advice, and so our journey together begins.
- If the client has had little exposure to investing in direct equities, our next meeting is our education session. I use a simple flip chart and the client learns about what the risks are and how this risk can be managed. They learn about the risks we are exposed to when we invest in growth assets; they learn about diversification, and the difference between investing and speculating. At the end of this education meeting, they have sufficient knowledge to decide what their own investment profile is going to be. They also understand the written advice when it is presented…
The client and I then work to decide on the best strategy to achieve their medium- to long-term goals. Once this is established we can construct an investment portfolio – together.
The client takes home their flip chart and their ‘Understanding Your Advice’ booklet. They read this booklet before the advice document is presented, and of course can refer back to their flip charts as we make progress.
For those advisers who do not engage with their clients in quite the same way, I do encourage you to try this rewarding approach…
As Eleanor’s journey continues throughout 2015, we will bring you more of her thoughts and ideas, focusing in particular on extracts from her diary that address issues common to many financial advisers.
Take this link to read Eleanor’s monthly diaries in full
For more from Eleanor, click here to read her interview in Lessons from Leaders.
Eleanor Dartnall is the 2014 AFA Adviser of the Year. She has performed a variety of roles within the banking and financial services industry over several decades and has been a financial adviser for the last 15 years. She commenced her own practice, Dartnall Advisers, in 2006.