Industry Insights | 2 min read

Tips on how to build a successful investment practice

How do you build a successful investment practice? That’s the question that Kritz Coetzee, Regional Manager at Glacier, posed during a webinar earlier this year. With more than 30 years’ experience in the investment industry, he had some interesting observations and insights to share.

Attributes of successful investment practices

Kritz has observed the following attributes that successful investment practices have in common:

  • Building the 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 very possible if you stick to the basics and are thorough.
  • Don’t over-engineer solutions or become overly inventive.
  •  Successful intermediaries never forget that they are working with clients’ money.

Kritz offers some tips that could help to build a successful investment practice

  1. Promise nothing and manage your clients’ expectations.
  2. Your risk profile should not reflect in your client’s risk profile.
  3. FAIS is your friend – err on the side of caution.
  4. Your client’s lack of retirement savings is not your fault. Whilst you have great empathy for their situation, you can’t create retirement income that your client cannot afford. If your client doesn’t accept this, be prepared to walk away.
  5. Regular communication with your client is a critical ingredient to good relationships. During COVID and lockdown, the intermediaries who survived and thrived were the ones that reached out to their clients often.
  6. One mistake is allowed in investments. Two in a row are fatal.
  7. Know who you are and the job you have to do. It is difficult to be be an adviser and an asset manager, although you need to understand both worlds implicitly. Stick to your skills as an adviser and hone them to the point of excellence. Let other experts take care of asset management.
  8. Choose your investment clients carefully – they cost money to service.
  9. Define your value proposition. Offering lower fees is not a value proposition. Neither is switching funds nor offering performance. They all contribute to the outcome. Your value proposition speaks to your purpose.
  10. Ensure that your practice is able to deal with all your clients, including your investment ones, in your absence.
  11. Investment knowledge is key to your craft, so keep learning. Listen, read, engage, enhance your insights – these activities are critical to improving your skills set.
  12. Ensure that the platform you choose is reputable and supports your value proposition. Functionality, sustainability, fund choice, rigorous research and agnosticism – these are characteristics to look for in the platform you choose.
  13. 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.
  14. Really get to know your clients – their dreams, fears and aspirations. This will help inform your role as a financial adviser.
  15. Teach your clients.  Educate them about investments while they are on their saving journey. Host webinars where they get to know you and the value that you add to their lives. Trust is built this way. Informed clients are easier to engage with, especially when market returns are volatile.
  16. It’s not only about the funds you choose but also about the tax structure. Tax planning by itself adds tremendous value as a basis for investment planning.  
Glacier Financial Solutions (Pty) Ltd and Sanlam Life Insurance Ltd are licensed financial services providers

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