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Do advisers need a high street presence anymore?

by: Rebecca Jones
  • 06/12/2013
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Rebecca Jones investigates whether having a street-side office is, or ever was, important for financial advisory firms.

In today’s internet age, it seems a truism that financial advisers no longer need to have a visible high street presence – if indeed, they ever did. Now, argue most, the general population is making its consumer, business and financial choices via Google, not the high street.

But how true is this? After all, generations of today’s population did not grow up with the internet and many still put a large amount of faith into a visible, accessible high street brand. This is not restricted to the likes of Marks & Spencer but, evidently, includes banks.

Indeed, when it comes to their finances, most people still want the option to pop in to a bank and speak to someone informally, with a 2009 poll revealing that 53% of Brits would not even consider saving with a bank that did not have a local high street branch.

Drumming up business

Of course, financial advisers are not banks, so just how relevant is this example? In terms of brand awareness, it is perhaps more-so than you would think. Yorkshire-based advisory firm Dobson and Hodge, established some 80 years ago, currently occupies a central office location close to the main town, which director Paul Stocks believes is important to its success.

“You are more likely to go with someone whose name you recognise than pick somebody you have never heard of. Being on quite a main road means we are getting that sort of exposure to passers-by,” he says.

However, director of Barretts Financial Solutions Kim Barrett, who operates his firm from his home, has a different view.

“Financial advice is more about reputation passed on by word of mouth than someone driving past your window and deciding to knock on your door,” he argues.

Barrett does, however, feel that branding and brand awareness is important and says that his firm’s name, logo and website form the basis of its ‘presence’, which he hopes communicates his values to clients.

The main debate concerning whether advisers should have a high street presence centres on the issue of ‘passing trade’, which Barrett argues has vastly reduced.

“The passing trade element of what we do is less than ever. In the past, there were some things that were more one-stop, like life assurance or a mortgage, but invariably it is now about establishing a relationship with a client,” he argues.

Simon Webster, managing director of Facts & Figures, agrees, adding that despite having a well-signed high street presence, he gets no passing trade at all.

Presenting the right image

Financial advisers, especially in today’s commission-free world, should be focusing on creating relationships with – preferably wealthy – clients via referrals. With this in mind, do they really want to be attracting passing trade? If not, what is the need for a high street office?

This is a common argument; however, it might be missing the point. While Stocks does indeed get the odd walk in, he argues that having a central office location is more useful for the image it projects, adding that his clients put a lot of stock in visiting a town centre-located office to talk about their finances, rather than his living room. Meanwhile, for Webster, having a high street office can also help with professional contacts.

Barrett also believes that image and first impressions are an important factor of financial advice.

“Image is important. Taking it to the extreme, if someone had to walk through a dirty back alley to get to your office, you are not presenting the right sort of image. You want to have an air of professionalism,” he says, insisting that his home comfortably projects that.

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However, while image is important, trust is arguably more so and, for Barrett, building that trust has little to nothing to do with the look of the premises you operate from.

“The whole advice relationship is built on trust and you are not going to gain someone’s trust instantly, are you? They are going to give you a try based on something more than your office,” he says.

When it comes to appointing a financial adviser, Barrett claims there are two key criteria for clients: what they are going to be charged and what qualifications the adviser has. “The trust follows,” he says.

Online and offline: matching up

Whether it is the strength of your qualifications, the quality and reliability of your service or your professional integrity, few of these things can be communicated through a shop front alone.

This is why an adviser’s richest source of new business tends to be customer referrals. However, the internet is catching up fast.

“Around 50% of new enquiries now come via the web,” says Barrett.
“A lot of these consumers would have done some research – for example, looking around the Unbiased site and comparing your site to others – before getting in touch with you. They will look at a lot.”

The nature of modern life, in which many people will spend an evening surfing the internet, comparing and contrasting various products and services before making a final decision, means a strong web presence is now more important than ever as a marketing tool.

Perhaps unsurprisingly, Danny Cox, head of financial planning at online direct-to-consumer platform Hargreaves Lansdown, argues that an internet presence is now “vastly more powerful than bricks and mortar” for financial advisers, as well as being less expensive than maintaining an office.

Of course, having an office and having a high street presence are two different things and should not be confused. With the exception of Cox and a few other pure online advocates perhaps, most advisers would agree that, no matter where you operate from, meeting your client face-to-face is crucial to the advice process and having an office, no matter where it is located, can be useful.

“Web presence is important but the type of clients we have like to come to our office. It gives them a bit of peace of mind. People deal with people and it is very difficult to get a genuine opinion on someone when you cannot look them in the eye,” argues Stocks.

A high street presence clearly has its benefits: increased brand awareness within your local community, perhaps the odd walk-in client, image and professional “bona fides”.

However, the extent to which the net positive effect of your location can be measured is limited, meaning that, as with much in financial advice, if and where you run an office will largely be down to personal preference. The most important thing is to find a model that works for you and your clients. As time goes on, that may well be an office-less, web-based one.

Your say: Do financial advisers need a high street presence?

Jason Butler, director, Bloomsbury Wealth
“An adviser’s office needs to be accessible to clients but they do not have to have a shop front. Referrals are the key to growth, not a big hoarding.”

David Gibson, director, Gibson Financial Planning
“Clients do their research online and do not pop in on off the street to invest £100,000.”

Clayton Cumming, IFA, Advice & Wealth Management Solutions
“Advisers do not need an office. We have a virtual office that we can use if required and it reduces our overall costs substantially.”

Mike Horseman, managing director, Cockburn Lucas
“I doubt many advisers get a lot of people walking in from the street but a shop could be good for local presence, brand and identity.”

Pete Matthew, managing director, Jacksons Wealth
“We get far more new client enquiries from our online efforts than we do from walk-ins. The public search online these days.”

Joss Harwood, managing director, Eldon Financial Planning
“We never considered being in the centre of town. Would the typical client a financial planner would like to work with just walk in off the street?”

Mark Hibbitt, director, Sovereign Independent Financial Advisers
“It is only of use if the adviser’s business plan is reliant on building a presence in the local community and attracting walk-in business.”

Alistair Cunningham, financial planning director, Wingate Financial Planning
“It is useful for clients to visit our offices but a ‘shopfront’ is not needed.”

Ashley Clark, director, NeedAnAdviser.com
“We get 50 times the amount of enquiries online as from our high street presence, with the same maintenance costs.”

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