May 5, 2011
July 7, 2023
by
Claudia Pritchitt
PB Comms

Changing times require focus on goodwill

With a big turnover expected in financial planning businesses as babyboomer owners retire and other changes come into effect, the sector can learn from mistakes made in other professions about preserving goodwill.Generally, professional and personal service organisations still don’t seem to understand that goodwill is one of the most valuable assets they own.Perhaps it is a hangover from the days when professionals felt they were superior to “trade” and that they didn’t need to explain anything to clients. But making the most of every asset – and in particular goodwill – is vital to maintain and increase the value of any professional practice.Recently, two suppliers I have used for many years have ignored the need to manage their goodwill. One was a new owner, the other a long-established firm, and both were guilty of not understanding that appropriate communications can both protect and enhance the value of any enterprise.With the first example, a doctor took over a general practice when the incumbent retired. In the second, a client service manager left a small professional practice that my family had been using for 30 years.In the first instance, the doctor buying the practice didn’t get any help from the seller to achieve value from the goodwill they had purchased along with the business, and protect future income.I had been going to this practice since I was a child, and thought I had a good relationship with the doctor. But when he retired, I knew nothing about it for some months afterwards, when the new owner wrote to tell me she had taken over.For the doctor who was retiring, it’s understandable that his thoughts were on things other than writing to patients to let them know he’s off to the golf course, and arguably there’s nothing in it for him to do so. But there certainly is for the incoming doctor and this is a lesson for anyone considering buying into a financial planning practice.In the example I experienced, part of the agreement should have been that the seller would write to all patients advising them of the imminent change, thanking them for their patronage, and recommending the new doctor – highlighting her experience and qualifications – thus protecting the practice’s valuable goodwill.It clearly isn’t an isolated experience, and friends I’ve spoken with about it have had similar experiences. For most, the solution was that they simply found another doctor.In the second example, my contact at a professional services organisation left the company because they were moving interstate. But the first I heard about it was when I rang to make an appointment and was told my contact had left and that a new person was taking over my account.It’s almost as if service providers don’t want to communicate any change of circumstances, believing it will always be seen as bad news, and think that somehow, if they do nothing, no-one will notice.But change of personnel is inevitable in professional services – people move on and others take over. So why not face the reality and involve the clients in the change?To me, a simple email before the event, not sometime later if at all, is the best approach. It doesn’t have to be complicated – something on the lines of:“Just to let you know that for personal reasons Joe Bloggs has moved back to Perth to be closer to his family and that Jane Smith, who has been with the firm for five years, is taking over and will be your contact from now on”.The email could also include some words of encouragement about the relationship and commitment to service – and for financial planning firms, contain an update about issues of the day.Most people don’t really want the hassle of changing suppliers but they will if they feel they are being used or taken for granted.Keeping clients informed isn’t hard, and it shows openness and involvement. It must be better than keeping them in the dark, and possibly raising the question that there’s more to the story that the firm wants them to know.

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