CHRISISM #30 - The Platinum Package

29 November 2016

Have you kicked a “needs analysis” into touch and replaced it with a “wants analysis” yet? If so, then it’s time to embrace the concept of “The Platinum Package”

Hopefully most of you have already moved from a needs analysis to a wants analysis and are thereby well on your way to turning a grudge purchase into a fantastic opportunity for your clients. If you haven’t yet made this change, please refer to Chrisism#9 to find out why you should.

To use a snow skiing analogy, the concept of the wants analysis is akin to starting at the top of the mountain and skiing down as opposed to the needs analysis which is akin to starting at the bottom of the mountain and skiing up, which skiers tell me is much harder and not nearly as much fun!

The wants analysis involves us helping our clients tell us what financial outcomes they would want in certain specific “what if” scenarios. It is crucial to understand that it must be the client who verbalises what outcomes they would want rather than us suggesting what outcomes they should want and them agreeing – and that is why the structure of the questions we ask is so important, because the questions must be as easy as possible for the client to answer:- e.g. “In the event of serious illness or accident, where between 0% and 100% would you want your income to be replaced?”

Once we have helped our client verbalise what financial outcomes they would want, we will be in a a position to use our expertise to put together an appropriate combination of types and levels of cover specifically designed to achieve those financial outcomes the client has told us they want – thereby, incidentally, putting as big a tick as possible in the “appropriateness of advice” box. This  will represent the combination of types and levels of cover that the client will need to put in place in order to achieve all of the financial outcomes they have told you they would want – and it is this personal protection package that becomes known as “The Platinum Package”.

When you present the platinum package to your client, it is quite normal for your client’s eyes to drift to the foot of the page and check out the total cost and for them to experience a sharp intake of breath, which is perfectly manageable, as we can then establish how close to that figure they can get day one. This then leads to us helping our client to prioritise the outcomes they want so as to ensure that we are achieving the most important and fundamental outcomes within their budget, but maybe leaving the luxury items until they hopefully have more cash flow. What you want to guard against is putting a platinum package in front of your client, the cost of which produces not just a sharp intake of breath, but more a run for the door scenario, as this is not so manageable.

For this reason, in some cases you may have to do a little trimming of the platinum package before you present it to your client. We will be exploring the topic of “trimming the platinum package to accommodate the budget” in another “Chrisism” down the track. 

The Risk Workshop by Chris Unwin

Are you a financial adviser who would like all of your clients to have appropriate types and levels of personal protection? But perhaps you feel you need a more structured and client friendly engagement process?