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Forward Thinking Magazine : April 2011
52 Referrals – new clients may be closer than you think. Your existing clients who already know the value of your advice may refer you to family and friends. They may have children who need assistance with budgeting when they enter the workforce, or help saving a deposit for their first home. This can then lead onto discussions about other services and strategies, such as lending, risk management, investments and estate planning. John Stinson explains that many of their referrals are existing clients referring friends or family. “We’ve got clients that we have been working with for ten years and they’ve got houses and lifestyles and those sorts of things that are above their expectation. They’re very appreciative of where it’s come from.” He adds, “It’s commonplace for families to ask us to work with their children now.” So why have cashflow at the heart of your practice? Grow your client base – providing cashflow management advice can help you reach different client segments. For example, this strategy is particularly relevant for accumulator clients who may want help with budgeting and saving to start an investment portfolio. It may also assist you with targeting Generation Y or other new client groups. For example, Sam Hunt sees Como’s proprietary Cashtrack software becoming a tool for Generation Y clients going forward. “It’s a broader service, not as high touch as we currently offer to wealth accumulators, but we see them having access to the software and making their own budgets.” Education is key – use clear and consistent language to explain cashflow strategies to your clients. WB Financial is very consistent with its message. “Cashflow control is discipline,” John Stinson says. He finds the educational component to be a bit of a revelation for many Generation Y clients, while baby boomers are more familiar with the message from their parents of save your money, pay down debt, don’t spend money before you have it – even if they have broken the rules. cashflow patterns – help your clients understand their money habits. A budgeting or cashflow planning tool may give you a better idea of their cashflow pattern. develop a cashflow strategy – understand your client’s financial goals and build a cashflow strategy to help them get there. Your clients will need to agree and commit to the strategy and understand the impact of their lifestyle choices. Sam Hunt enters client’s expenditure patterns into Xplan to show what impact a client’s spending has on their total financial wellbeing. Track and monitor – help your clients monitor their cashflow to ensure they stay on track. It’s important you have visibility over their cash portfolio. Keep up the conversation – allocate time at reviews to assess your client’s progress. Be motivational – share your positive cashflow stories. John Stinson compares building good cash habits with diet and exercise. “Everyone is well intentioned. Everyone would like to do it. Very few people can do it without some sort of support and mentoring. Even the ones we do support and mentor, and they’re well intentioned, will still struggle from time to time.” 10 ways to build cashflow into your advice model