What is in the mind of a first interviewee? An adviser asked me this during the week.
He’s seen a single woman, 68, who’s just retired with $250,000, half in super, half in the pension. She has a grip on various sectors and dislikes her (industry) super fund.
When, after half an hour or so, the adviser quoted $1600 for a simple statement of advice (SOA), she left, saying: “I was hoping you would tell me what to do.”
When he asked what she might pay for his time, she felt $150 would be the go.
His next one was a woman in her early 60s, redundancy, same for hubby, kept on peeling off papers with details of assets: about $2 million in real estate, about $1.5 million in cash and super.
She left after an hour, the adviser having quoted $3000 for a complex SOA. She admitted she was looking for guidance as to what to do with the real estate.
The adviser asked me what should he do. “I gather,” he said, “with bean-counters and briefs, they need to hear the magic words from the client”, that they are retaining the accountant or lawyer and instructing them to “obtain all the relevant material so we can help you win your case, or be ATO/ASIC compliant, or get your taxes down”.
So, asked the adviser of me, what can he say without talking tactics or product?
He mentioned some of the following: good advice can maximise Centrelink/obviate taxes/keep track of investments/work with the client to make their money last as long as the client lives/provide a service to keep things simple/keep in mind estate planning issues and plan for aged care costs.
“Anything else?” he asked. “Would you pay $3000 for an SOA? What about a transaction fee? Would you join our ongoing service program: how much and what do I get?”
There were some signs of hope, he said, in doing a little more direct share work over managed funds: people seem willing to pay for the transparency of two dividends a year plus the claim for franking credits, over the uncertainty and complexity of unit trust distributions.
He’s now saying his strategy is: the first half hour is at no cost. After that, the chat ceases and the request is made to be retained and do the discovery and then the strategy. But, will the client pay for a strategy which they may not like? So, he says to the client, “What would you like?”
“Well, um … don’t know really, but I don’t like shares …”
And so it goes. An hour later, he still doesn’t have a mandate.
