Getting onboard with offboarding
A positive approach to client servicing and offboarding
NextWealth has published a guide called ‘Getting onboard with offboarding: A positive approach to client servicing and offboarding’. It is supported by HUB Financial Solutions (part of Just Group) and Vanguard and sets out to offer a practical guide to advice firms exploring how to profitably deliver the best value to clients.
For the purpose of this report, we are defining ‘offboarding’ as a process in which the advice firm ceases charging clients an ongoing advice fee.
Offboarding is not a new concept: firms have long dealt with clients’ needs changing. In some cases this means they no longer want or need a full, ongoing advice service.
A mismatch can result from:
- Clients falling outside the scope of a proposition or service band.
- Advisers leaving a firm, with clients redistributed.
- Mergers and acquisitions affecting the makeup of the client bank.
- Clients no longer responding to requests from the advice firm.
New regulation tends to reignite debate over the cost of advice. Consumer Duty is just the latest chapter, making firms think harder about the clients they serve and whether they can continue to serve them profitably.
Concerns around Consumer Duty are particularly acute for firms struggling to demonstrate their value to clients with smaller portfolios and less complex needs. Other firms are wary of clients less engaged with the advice relationship.
Against this backdrop, advice firms are sharpening their focus on delivering good client outcomes and measuring their effectiveness in doing so. Firms must consider:
- How to deliver the best possible outcomes for the best possible value.
- When to think about offboarding.
- What to do about long-standing, loyal clients who no longer fit their service proposition without compromising on value.
- Different pathways to offboarding while maintaining best outcomes for clients and cost-effectiveness (for the client and the firm).
Methodology
The findings presented in this guide are based on quantitative and qualitative research conducted by NextWealth in October 2024, including:
- An online survey of 200 financial advice professionals.
- In-depth interviews with 11 financial advice firms:
- NextWealth selected the firms independently
- They represent a range of businesses, by size (in terms of AUM and number of advisers) and include directly authorised and appointed representative firms.
- Different approaches to managing low-value, low-engagement clients and those that don’t fit their core target proposition.
- A variety of perspectives on the practice of offboarding clients.
You can download a copy of the report by completing the form.
