What creates an outstanding business?

This week, the Chief Executive Officer of the Personal Finance Society, Keith Richards, shares his tips for success and which attributes he sees as making a company lucrative, ethical and truly customer focused.



I was speaking to an adviser recently who considered his business a success because it enabled him to work just three days and spend a similar amount of time playing golf. Personally, I couldn’t imagine a greater waste of time – not to mention the cost of all those lost balls! Without getting into the ‘how do you measure success?’ argument let’s assume a more traditional measure of success for a business as one that is a profitable ongoing concern.
 
Over the past few years it has been a privilege to have been involved in judging various adviser awards. In that time I have seen some outstanding examples of successful, ethical and truly customer focused service businesses. I have also seen a few that probably aren’t around anymore, but that’s another story.
 
For medium to large-sized firms
 
Getting the right balance in your management team is often crucial for success. A well-structured board needs diversity in order to draw upon different skills from advisory, operations and accountancy to find the right balance of ideas and experience to grow the business profitably and sustainably.
 
Invest in your people and their professional development - not just in their qualifications, but in their soft skills, job promotion and team integration. A 21st century advisory firm should be team led and team focused and not simply an arena for individuals to rule the roost and enjoy all the rewards.
 
Have a consistent approach - uniformity is invaluable for risk management, but it requires like-minded individuals to make it work. It is therefore imperative to recruit the right people and to develop them into the right culture and ethos. Knowledge and skills can be attained, attitude can't.

Client in the centre

The number one feedback I hear from successful advisers and advisory firms is to visibly always put the client at the centre of everything you do, making them your absolute priority. Listen and be genuinely interested in them and their lives, fully understand what they are looking to achieve and communicate with them in simple plain English. Frequent personal contact is key to strong relationships, even if only to say hello from time to time. Embed compliance and TCF into your business culture, don’t just see it as something that you have to do in order to remain in business – ultimately, good compliance is good business practice.
 
Clarity of proposition
 
Second is having a straight forward, easy to understand and clearly defined service proposition; one that is designed specifically to satisfy the specific needs of your clients. Clients need to clearly understand the proposition and the costs involved – they typically don’t like surprises. This may define a credible investment proposition but must outline the ongoing services elements. Not forgetting that you must then reinforce all of this clarity by delivering on your promises [then you are into brand building territory, which could see your success snowball!]. Don’t forget that a consistent process and operational efficiency are often the core ingredients to customer satisfaction and profitability.
 
Team effort
 
The next most important trait of a successful advisory business is the importance of, and investment in the team, considered critical in the post-RDR landscape. Firms tell me that employing higher qualified advisers attracts clients and professional connections. It is also important to invest in top quality paraplanners and administration staff too and support them in their education and professional development. Several advisory business leaders have told me that a sound technical expertise allows the business to largely run itself and that a highly capable, satisfied, happy and motivated support team will strengthen your business and bring its brand to life.

Finally, two other phrases stand out as being common to successful advisory businesses:

  • Niche – you can rarely succeed in being ‘all things to all people’ so you need to either offer a specialist service or offer a relevant service tailored to a specific audience. Those with unique skills and/or knowledge are often successful in positioning themselves as an authority, which tends to attract ‘the right type’ of clients, and at a relevant fee.
  • Professional connections – all successful businesses tend to operate as part of a network of complementing skills. Many advisory firms have achieved great success in recent years by working in unison with other professional firms, usually accountants and solicitors, to provide clients with a seamless and holistic professional advice service. Such a collaborative approach also helps to root your business in its local community, becoming the automatic choice for those that have a need for your service. Don’t forget that while professional qualifications tend to be a hygiene factor for individual investors to be considered a peer in wider professional circles you must be able to demonstrate advanced knowledge.

I’m sure there are many other important factors that have been overlooked for brevity – for example there has been no mention of technology or marketing here, two essential ingredients for any forward looking, growth focused business. That said, the above seems like a sensible place to start for any advisory business focused on moving from a cottage industry into an economically viable business.

Now, where is that damn ball?


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