Helpful tips and advice
Improve your business plans
As part of our business development services for IFAs, our Top Tips act as memory joggers or checklists, reminding you of the main issues to be aware of as you plan your campaign or take stock of your business plans. Whether you're aiming to segment your client base, build an effective website or even hire staff, we have created a range of Top tips which we hope will help.
ISAs have become a very popular savings vehicle in the UK with over 17 million people owning one. With an annual ISA allowance of up to £20,000 this year (excluding Lifetime ISA) and a quick and easy application process, they are also obvious products for mailing.
However, to make even this type of activity cost effective, client segmentation is key. Done correctly, it will save you money and maximise response, as you target only the most interested candidates.
1. Check clients' existing activity
Step one is to check your clients' existing holdings and activity. Clients with a variety of investments obviously need some in an ISA. Indeed, they may already hold ISAs from previous tax years. However, clients who have just taken out large mortgages with five times income lenders to get their dream house will have little money spare at the moment for a long term investment.
2. Split into actual and potential clients'
Although this sounds simple, many people do not split their database between clients with whom they have an established relationship and those with whom they do not. However, this is very important as the tone of your letter should be tailored to the relationship you have.
You cannot assume a potential client even knows who you are, whilst an existing client will be offended if you write in a manner which suggests you have never met.
For an ISA mailing, once you have identified your prospects, the most obvious split is:
- Existing clients, no ISA investment this tax year.
- Existing clients, with ISA investment but full allowance not yet used.
- Potential clients, no ISA investment to your knowledge.
The latter will always be the least responsive and will need regular contact to return the value of the investment you put into them. Over the long term, this can be very valuable and worth the extra expense. However, only target them if you are positively trying to win new clients and can take the time to nurture them into proper relationships.
4. Write your letters
You now need to write an appropriate letter for each client segment. Existing client letters should be friendly yet professional. For better known clients, you may wish to include a reference to their circumstances to show you know who they are.
Potential client letters need to be more formal as they have never met you and their impression of you will be formed entirely from the letter (and inserts).
In both cases, make sure you focus the letter on the benefits of the product. Not paying the taxman a second time on money you have earned is a powerful message, as is long term real growth from the stock market to enhance your wealth. Administration detail, on the other hand, has no place in a sales letter.
5. Consider your call to action
Keep your message simple. Unless you are absolutely sure you know what will suit the client - and that they fully understand an ISA - do not start offering specific funds. Simply reassure them that there is a solution for them out there – you have plenty of time to go into detail once you meet them face to face.
The only exception to this is the top-up mailing. In this case, your client has already given their consent to the investment option by investing. Placing an application form into these packs so they can add to it can save both you and your client a lot of time.
Tip: Our client libraries include a fully formatted client Guide to ISAs updated for the 2012/13 tax year and draft cover letters for your ISA mailing...
6. A word about discounts
Lots of companies sell specific investment options with discounts through advertising to the mass market. This is a message for the hardened ISA investor who generally wants little or no input from an adviser. You will know whether you have clients like this and you should probably set up a specific segment (and mailing) if there are enough of them.
However, if you are a full service adviser with clients who value your help, you should be confident enough to be able to leave this level of detail out of any mailing letter.