Attributes of successful investment practices
How do you build a successful investment practice? With more than 30 years’ experience in the investment industry, Sanlam regional manager Kritz Coetzee has some interesting observations and insights to share.
Successful investment practices have these attributes and adhere to some key principles:
Building an investment client base takes time it doesn’t happen overnight but be assured, all practices have access to investment clients.
Investment business requires care, nurturing and attention.
Building an investment book is possible if you stick to the basics and you are thorough.
Don’t over-engineer solutions or become overly inventive.
Successful intermediaries never forget that they are working with their clients’ money.
Tips to help you build a successful investment practice.
Promise nothing and manage your clients’ expectations.
Your risk profile should not reflect in your client’s risk profile.
The Financial Advisory and Intermediary Services Act (FAIS) is your friend err on the side of caution and compliance.
Your client’s lack of retirement savings is not your fault. While you have great empathy for their situation, you can’t generate retirement income that your client cannot afford. If your client doesn’t accept this, be prepared to walk away.
Regular communication with clients is a critical ingredient in good relationships. During Covid-19 and lockdown, the intermediaries who survived and thrived were the ones who reached out to their clients regularly.
Any mistake in constructing a portfolio can cost your client money approach this aspect with due care. Discretionary fund managers can help.
Know who you are and the job you have to do. It is difficult to be an adviser as well as an asset manager. Although you need to understand both worlds implicitly, stick to your adviser skills and hone them to the point of excellence. Let other experts take care of asset management.
Choose your investment clients carefully they cost you money to service.
Define your value proposition. Offering lower fees is not a value proposition. Neither is switching funds or offering performance. They all contribute to the outcome. Define your value proposition in terms of your purpose.
Ensure that your practice is able to deal with all your clients
including your investment clients at all times, whether you are present or absent.
Investment knowledge is key to your profession, so keep learning. Listen, read, engage and enhance your insights these activities are critical to improving your skills set.
Ensure that the platform you choose is reputable and supports your value proposition. Sustainability, functionality, choice of funds, rigorous research and agnosticism these are characteristics to look for in a great platform.
Focus on a market segment. You have the potential to become a specialist in that area and it helps in building a reputation and getting referrals.
Really get to know your clients their dreams, fears and aspirations. This will help inform your role as a financial adviser.
Build your business with its future in mind. Your current clients’ beneficiaries and nominees present a potential future client base for you. Get to know them equally as well as your clients.
Teach your clients. Educate them about investments while they are on their savings journey. Host in-person or online engagements where they get to know you and the value you add to their lives. Trust is built this way. Informed clients are easier to engage with, especially when market returns are volatile.
It’s not only about the funds you choose but also about the tax structure. Tax planning on its own adds tremendous value as a basis for investment planning.
Successful investing is about diversification and combining solutions, not merely products, to create the best outcome for your clients.
Contact Sticks Stiglingh at Strata BlueStar on 046-624-4948 or 071-612-7339 or sticks@stratabluestar.co.za for professional advice. Glacier Financial Solutions (Pty) Ltd is a licensed financial services provider. Sanlam Life Insurance Ltd is a licensed life insurer, financial services and registered credit provider (NCRCP43)