Protection can be the first item struck from household budgets during times of financial uncertainty. Lucy Quinton explains why consumers should be picky when it comes to choosing cover
The demand for timely and efficient customer service has never been more prevalent than today. It is defined as a series of activities designed to enhance the level of customer satisfaction - the feeling that a product or service has met expectations.
This definition adds that "customer service is more important if the purchase relates to a service as opposed to a product," - apt for the protection intermediary market.
In the current economic climate, it is essential that advisers up their game to meet consumer demand. Customers are tightening their belts so it is important, should they seek the advice of an intermediary, that they are encouraged to continue the business relationship with them in the future.
Matt Morris, policy adviser at LifeSearch, suggests there is no excuse for poor customer service and advisers who do not give their clients the best possible service will find themselves hit in the pocket.
Paul Banfield, director at Best Advice Financial Planning, agrees and says good customer service helps clients feel secure and builds relationships between them and advisers.
Good customer service provides an opportunity to increase consumer confidence in the adviser community and encourages people to not only return but to recommend their adviser to others, explains Roger Edwards, product director at Bright Grey.
The sector already seems to be taking heed as the level of service clients receive from intermediaries is high, as demonstrated by the latest Financial Ombudsman Service review that shows the proportion of complaints about IFAs has fallen three-fold.
However, intermediaries cannot be expected to take full responsibility. Instead, there should be an industry-wide initiative that ensures customer service levels remain high all around.
Ed Stuart-Brown, head of protection sales at Friends Provident, explains: "Customers do not always see a distinction between advisers and providers in many transactions and poor service from a provider can undermine the good efforts of the adviser."
Ian Brown, head of protection marketing at Skandia, offers the view that the service levels of advisers and providers are often seen by the consumer as being intertwined. "The provider ultimately needs to meet the service needs of the adviser and therefore the customer," he adds.
It is not only consumer service that is important but offering good service to advisers is also key.
Stuart-Brown says advisers are discerning customers and will not tolerate poor service from providers. In an intermediated market, quality counts when deciding on where to place business.
The principles outlined in the Financial Services Authority's guidelines as part of the Treating Customers Fairly (TCF) regulation should ensure high levels of consumer service are adhered to. Stuart-Brown says advisers that fully embrace TCF into their businesses will gain competitive advantage through differentiating on service.
To improve customer service there are a number of tips that advisers should seek to follow (see box below). Edwards says much of it boils down to common sense but it is possible to occasionally lose sight of the obvious and the market often needs to be reminded.
Stuart-Brown says there is increasing requirement for advisers to attain and retain professional status through examination and this improves the service a client gets. "The vibrant independent sector is testament to the fact many adviser firms are providing a high level of service already but each year the bar goes up and advisers need to adapt to remain competitive," he claims.
It should be remembered this is a service industry and consumers want to interact with people who are friendly and have their interests at heart. Ultimately, to the public, this is perceived as more important than financial skills and competence, says one adviser.
Added value propositions are being wasted on consumers. According to Stuart-Brown, clients "simply take that service for granted". He says intermediaries should "value the service and professionalism that they offer more.
"Imagine you had 24/7 access to your accountant on any matter about your financial affairs supported with regular quarterly newsletters on tax matters. You may expect to be charged a premium for that type of service. However, advisers often give this away for free," Stuart-Brown explains and adds, "if they do not value it, the customer certainly will not".
It is also important to consider relationships - if advisers give only the bare minimum, they will struggle.
Alan Lakey, principal of Highclere Financial Services, says personal service is one way IFAs can distinguish themselves from direct sales forces. "I have long argued advisers evolve personal relationships with their clients whereas other firms such as banks fail in this respect. Frequently, the bank staff change so no individual rapport can ever be cemented," he adds.
This is true for provider adviser relationships as well. Edwards explains: "The provider needs to understand how each of its adviser businesses work: what their client profiles are, how their business models work and then come up with individual adviser-tailored strategies."
Lakey says that provider services have fallen from their previously "poor" position to "appalling" and says the emphasis should be on service issues when it is geared towards new business: "Most companies fail to realise that if they do not provide the service they will not get the new business."
LifeSearch's Morris adds providers need to give access to underwriters so advisers can call them directly and find out immediately what sort of premium the client can expect and whether they may be declined or not. Setting customers' premium expectations he says, is a central part of giving them a good experience.
"Good customer service is about being prepared to go the extra mile while keeping the customer informed every step of the way so they are not left in the dark," Morris says.
The market is doing well to recognise the opportunities good customer service brings, but in the wake of economic uncertainty, it needs to work together to present a cohesive image to consumers as they are the ones who think twice about taking out protection at all.
12 Steps for advisers to ensure good customer service
- Do not overcomplicate the sale.
- Empathise with the client - protection involves emotive issues.
- Set expectation - if the client is likely to be rated, make sure they know about it as soon as possible.
- Always do what you say you will do. There is nothing more annoying than empty promises.
- Keep in touch with clients even it is just a letter asking if they are ok. It confirms they have not been forgotten.
- Seek to add value by advising them on important matters affecting their lives such as divorce or marriage, assist with helpful information and guidance on how it impacts on their circumstances.
- Fully embrace the principles of TCF to gain competitive advantage.
- Incorporate technology to ensure advisers can react to their clients' demands by having access to real time client information.
- Do not blindly give away free advice. If you are not perceived to be valuing the advice, the client will not either.
- Design the business so that the customer is the focal point.
- Invest in good quality staff. Your customers are valuable and deserve the best.
- Never stop trying to understand the needs of your clients as they change constantly.
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