In the first part of a series, John Joe McGinley asks if advisers are prepared for the challenges ahead to their businesses.
How often do you get your hair cut or get your hair done? The human hair typically grows at a rate of around half an inch (1.25 centimetres) per month, and this rate of growth is consistent across the head. This means a constant stream of business for the tens of thousands of barbers and hair salons throughout the land.
Personally I get my hair cut twice a month but by a barber and I grudge paying more than £10 for this service. If I see a queue in one barber I move on to the next. For me it's all about price, convenience and speed. You can't do much with my hair anyway!
Others I know will quite happily wait for their favourite barber or stylist, book appointments and pay a premium price for the service they desire. For them it's about the look and experience not the price.
That's consumers all over the world and for all products and services and its why any service profession has to ensure it understands the price versus value dynamic and communicate this effectively in their client service proposition.
Consumers are always looking for ways of saving money, but this does not mean that they prefer cheap products. On the contrary according to a Nielsen study on buying habits, 61% of consumers consider value before buying any product, while 58% also take price into account.
At least half of surveyed consumers also considered as "very influential" in choosing a retailer factors such as location convenience, promotions, and the abundance and variety of product.
The informed consumer
We are seeing the rise of the more reflective and critical consumer. More and more consumers now look for information on a product or service before making any purchasing decision. Invariably this search is conducted via the web using Google or other search engines.
No business can ignore consumer trends and the informed consumer is becoming more price conscious but with a willingness to pay if real value can be demonstrated.
Plan for success
Success for any business in our profession has to be about identifying what clients and future customers want and to deliver this profitably not just once but on an on-going basis.
No business can do this without a proposition and plan of action to take advantage of the many opportunities we face in UK financial services.
We have an ageing population, an improving economy, auto enrolment and the rise of social media. Each one full of opportunity for every business regardless of size, if they are prepared and ready to take advantage.
The fact is there are not enough qualified financial advisers to meet the advice needs of the baby boomers and the many employers facing auto enrolment. We also have a whole range of technology platforms all now designed to help advisers from protection to pensions.
So why are so many businesses failing to take advantage of these opportunities?
Seeking the answer, I am reminded of the great quote from Thomas Edison
"Good fortune is what happens when opportunity meets with planning."
The key to success in life and in business is having a plan. Be honest how robust are many business action plans? Do many even have one? If they do not have one, then how will they take advantage of the opportunities which are all around us?
The future of any business really does depend positively or negatively on how they plan for the future.
The winners of the future need to consider and have answers to the following questions:
• Will your business be involved in the new opportunities, if so how deeply?
• How robust is your plan to exploit these opportunities?
• Which clients will you focus your attention on?
• What services will you offer?
• How will you be remunerated and how will you satisfy the regulator?
Over the coming months I am going to highlight how you can answer each question and build a plan for the future.
John Joe McGinley is head of Glassagh Consulting