Become a one-stop shop for your customers

The proliferation of new financial products and services has led to many changes in the way the industry sells itself to consumers. Traditionally, insurance companies advertised their insurance policies as the best; banks tried to attract customers with higher interest rates on certificates of deposit; and they competed with tax preparers to provide the best service at the lowest possible price.

Nowadays, using the best attributes of products in marketing activities is still important today, but service is rapidly replacing product supply and becoming the main criterion that customers consider when choosing to start a business. This trend naturally leads financial service providers to provide comprehensive products and services under one umbrella. In this type of arrangement, both the supplier and the customer can have several benefits, but planners need to carefully consider several issues before implementing this approach in their practice.

What does one-stop shopping mean?

The definition of one-stop shopping today includes more products and services than ever before. The main industries are:

  • Cash management and other banking services
  • Brokerage and alternative investments
  • All forms of tax preparation and advice
  • University and estate planning
  • All major forms of insurance, including life, health and property insurance
  • Latest mortgage and loan products
  • Comprehensive financial planning
  • Accounting and payroll services

As the boundaries between commercial banks, brokers, and insurance companies become less obvious with each new product innovation, this list will continue to grow. Much of this integration was due to the repeal of the Glass-Steagall Act of 1933, which initially established clear boundaries between brokerage, insurance, and banking after the stock market crash of 1929.

One-stop shopping advantage

There are many advantages to providing customers with comprehensive financial services. These include:

One of the most obvious benefits is that one-stop shopping allows planners to earn much higher revenue from the same customers than competitors. If a customer walks into the local office of a well-known insurance company, no matter how much the customer likes and trusts the agent, the agent can only sell customer insurance.

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On the other hand, companies offering comprehensive products can also demonstrate how this all fits together by refinancing customers’ debts, preparing their income tax returns, opening Roth IRAs, and preparing customized financial plans. As a reward to customers, a customized financial plan can be provided for free as an incentive to use other services. The additional revenue from just one customer enables companies to reduce the effort required to find new business. This income difference is difficult to overcome, especially in today’s flooded and highly competitive market.

Customer Loyalty
A higher level of service will lead to a correspondingly higher level of customer trust. After all, if clients must provide planners with their tax information, it is not difficult to continue with the estate plan. In addition, if customers want to maintain the proper balance between insurance and investment, why not just do it in the same place where they can directly monitor the balance?

If a client receives a comprehensive financial plan with a list of recommendations, it is easy to see the benefits of having them all implemented internally, rather than going to a dozen other companies or agents to complete each project. Assuming that all services are provided competently and diligently, this kind of reasoning is hard to argue.

Coordinating the main participants

Of course, the ability to effectively provide comprehensive services requires tremendous effort and coordination. It is necessary to master multiple disciplines to establish and maintain a practice capable of providing multiple services. Therefore, companies adopting this strategy must hire qualified personnel for each service area provided.

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For example, the person in charge of a company can be a registered financial planner who conducts comprehensive financial, university and estate planning for clients. Then another employee can get a license to handle all banking, brokerage, and life insurance business, while another employee handles mortgage loans, and perhaps property and accident insurance. Health and long-term care experts may also be involved, as may people who are primarily engaged in alternative investments. Finally, the accountant or certified public accountant will be responsible for handling all tax-related business and advice.

In addition, the person in charge of the company must have sufficient knowledge of each service in order to effectively coordinate and supervise them. Supervision of such operations also requires an in-depth understanding of consumer privacy laws. In order to avoid legal liability, each customer needs to sign a set of related disclosure documents in order to share information among the company’s employees. Companies that ignore this procedure and assume that the customer allows the information provided by a service to be used for other purposes put themselves at risk.

Resources are scattered too finely

Another issue to consider is that the company may over-expand by providing too many products or services. Such mistakes can be costly-not only literally, but also in terms of undermining trust and responsibility. Therefore, the company must carefully consider whether it can handle the administrative and supervisory issues related to each service provided. Failure to provide a service branch properly can have a detrimental effect on the entire company, and liability due to errors in one area may exhaust resources dedicated to maintaining other business areas.

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Enterprise and retail

Both large and small companies have tried to provide one-stop shopping services and have achieved varying degrees of success. Although larger companies can provide more corporate support and structure for their products, retail boutique companies are naturally better at customizing services based on customer needs and conditions. Unsurprisingly, large conglomerates usually have more bureaucracy and strict company policies, which makes them difficult to compare with the level of personalized service of small companies. Therefore, they tend to rely more on brand awareness to attract customers.

At the same time, it can be difficult to effectively coordinate financial services at the corporate level. For example, all employees of a retail company can easily negotiate with each other about the customer’s situation and reach a consensus on an issue faster than employees working in different branches of the enterprise group. In smaller companies, almost all relevant information for a specific customer is available in one place at any time, and all employees can easily access it; for large companies, this is definitely not true.

Bottom line

Providing a one-stop shopping service is beneficial and demanding for companies of any size. Small companies must remember that they and their company counterparts face the same legal issues related to information sharing, while large companies need to understand the amount of work required to coordinate the needs of individual customers between branches. Either way, companies that successfully integrate integrated services into their products will benefit from increased revenue and lower costs. At the same time, customers can get lower costs and convenient returns. The ability to successfully integrate integrated services into financial planning practices can give planners a significant advantage in the competition.


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