As business consultants, this has been a key question for us this year. There are abundant opportunities in the marketplace and many advisers have been able to grow their businesses on the back of the changes in regulation. So you would be forgiven for thinking everything in the garden is rosy.
There is, however, one constant reply from advisers we are meeting: ‘We are just too busy to look at this!’
So in essence there are too many clients to deal with and not enough time to deal with many new opportunities.
The first thing is to prioritise what you do so you can create a little time each week to concentrate on the business. It should not be underestimated how difficult this will be as most advisers are so client focused they get sucked into dealing with client needs at the expense of having a deep and clear understanding of their own business needs.
Where might you focus some of this new found time?
Technology is one of the obvious starting points. Are you using your back office system to the right levels to make dealing with clients as easy as possible? Many firms are only using a small amount of the functionality of a back office system and typically use it only to store data. As many systems have added functionality it is worth spending a bit of time to find out how the system’s capabilities can bring more time efficiency to your business. Linked to the technology it is important that the right people in your firm are trained to use the system. If you have administrative support consider asking them to review the system to identify where it can save time and improve the client experience.
In light of the improvements in technology do you need to re-align any of your processes? A useful quote often attributed to Henry Ford is ‘If you always do what you’ve always done, you’ll always get what you’ve always got!’ If you are too busy dealing with clients then there is a good chance that your processes have continued to remain the same for a good length of time. All that will have happened is you are working harder or have recruited more staff. The risk might be you have recruited staff with the wrong skill set to really move your business forward.
If your firm has seen increasing numbers of clients seeking advice around retirement planning there are two very clear processes to review along with their interaction between them. The first is your financial planning process to ensure the client’s needs and goals, attitude to risk, capacity for loss, investment experience and current situation versus expected future situation are all captured and communicated in a way that is easy for the client to understand. This should also be stored within your back office system to ensure easy retrieval of information along with easy updating of valuations.
We have seen an increase in the use of cash flow modellers and retirement modellers which is a welcome step for many clients. However, there is a risk that clients become too blasé around the future picture of their money lasting well into their 90s. These models are only as good as the data captured so this reinforces the need for regular ongoing reviews to ensure the plan is kept on track.
Frequency of face to face meetings presents another opportunity to check the client proposition is fit for purpose. An increasing number of advisers are conducting telephone based ongoing review meetings because they suit the client best and are more time efficient for the advisers. Some advisers are using Skype or Facetime with great success. This also allows the adviser the opportunity to prioritise the clients that genuinely need a face to face meeting again saving time.
We are beginning to see evidence of advisers using a specialist within their firm to capture the data real time with clients during review meetings or ahead of the review meeting with the adviser to help the client engage with their plan more fully. This helps both the client and the adviser make the right decisions over time to achieve the client’s goals. So the adviser’s ability to help the client budget effectively for the future along with their ability to ensure all available tax allowances are used can add considerable value to the client.
The second process to really focus on is your investment process. There were considerable changes in advisers’ investment processes leading up to the Retail Distribution Review implementation, however, since that point there seems to be less focus on this process.
Yet the post-pensions freedom period will undoubtedly leave some advisers questioning their own attitude to risk in the context of the risk they have sitting on their own book of business. The burden of risk has clearly been moving from both Government and companies onto the shoulders of the individual. Increasingly ensuring the client’s money will not run out lies with them and their adviser, the ongoing review process has become critical along with the advice provided.
All of this perhaps presents an opportunity for you to review your investment process to utilise the use of technology and the skills of paraplanners. Also consider the opportunity to outsource some activities to investment managers and other providers to ensure the portfolio remains true to the risk profile and delivers what is expected to the client. Reviewing this along with increasing your use of online functionality for illustrations, applications and valuations will free up some of your own time to spend on client facing activities or on your own business.
Clients are changing too!
The recent discussion paper from the FCA highlights some other points to consider. This document is well worth a read, but here are a few headlines:
Just more reasons to factor into developing your proposition.
More details can be found in DP16/1: Ageing population and financial services discussion paper.
As we start the 2016/17 tax year, now may be a good time to review the propositions you have and whether they are still fit for purpose.