Soft skill slip-ups will cost you

Amid uncertainty there are some clear expectations, driven by the compelling need to own more of the margin across a value chain that continues to splinter. Prices will go on falling; further vertical integration is likely; and product providers are expected to either go back into the water to buy up distribution or use platforms to capture it.

A by-product of disaggregation is the reality that each part of the value chain is under more pressure to earn a crust and justify its existence. Proximity to the client puts advisers in a strong position to influence their share of margin, but more work is needed in some of the areas that have taken a back seat while regulatory requirements screamed loudest for attention.

Advisers agree there are, broadly, two areas in which they must articulate and deliver value. The first constitutes the ‘hard skills’; the things advisers explicitly charge for, like cashflow modelling, financial planning and asset allocation. Then there are the ‘soft metrics’, such as trust, experience, relationship and peace of mind, which are far harder to put a tangible value on.

The hard stuff is measurable, quantifiable and easy to put into a spreadsheet. Ironically, hard is easy and soft is difficult. The question is whether you and your team spend most time on the hard bits, merely because they’re easier to measure, to argue about and to hide behind.

It’s the soft stuff that advisers agree requires greater strategic consideration and is the real source of differentiation. The client experience is a big part of what they pay for, not just advice. Outcomes may be common, but client experiences need to reflect personal preferences. SJP is more expensive and less transparent (being very much bundled) but, from the customer’s point of view, it is a brand worth paying for.

Clients are now more demanding and discerning but their personal preferences can be more intimately understood (and sustainable value propositions successfully built around them) only with segmentation that goes far deeper than wealth bands alone.

Are you giving advice or facilitating an experience? Both matter.