When the fireworks go off on January 1, many planners wuold have been relaxing with a glass of champagne in their hands, reminiscing about the year that was. While many have also been writing down the usual New Year’s resolutions – travel, weight loss or spending more time with the family- there is one other important area to review: your business.
Elixir Consulting managing director, Sue Viskovic, says regular reviews are a core part of any smooth running advisory practice and recommends doing a thorough review on business strategy.
“I would always suggest just stop, take a good look at your business first and have a real think about how you’re doing everything… and if its once a year than make sure you do it properly,” Ms Viskovic says.
9Rok Consulting managing director Kim Payne says the focus of any reflection at the start of the year should be tied to what is needed in the business.
“If you’re looking at your New Year’s resolution it’s just becoming clearer on the things that you need to do to really grow that business or to get the results out of it that you want,” Ms Payne says.
Strategic Consulting and Training managing director Jim Stackpool, agrees that this is even more important in the new post-FOFA world of financial planning – when trotting out your old client service arrangements to clients is a thing of the past.
“We’re reaching an increasingly competitive environment for advice and retention of current advice clients is really crucial and needs to be driven by a conversation which we call the ‘why are you paying us’ conversation,” Mr Stackpool says.
“And even if they’ve been there for 20 years, we can’t take it for granted that what we did last year and the year before and the year before that is why they’re going to pay us.”
With the importance of retaining clients the top tip going into 2014, ifa asked the experts what they recommend planners should do, now that the New Year lights have faded.
Pinnacle Practice director Anne Fuchs says that reviewing your existing clients should be on every adviser’s agenda.
“I just think the housekeeping that needs to happen this year is really about pulling out your client base and actually highlighting those clients that, if you had to send them a client bill tomorrow with a direct debit visa statement, wouldn’t sign it and send it back,” Ms Fuchs says.
“They’re the vulnerable, ‘at risk’ revenue and you have to make a commercial call on what’s the likelihood of saving those clients, demonstrating value and reengaging them.”
The right advice for the right clients
Once clients are broken into segments, Mr Stackpool recommends ensuring the level of advice matches the client.
“Every client deserves respect whether they’ve been on the books for 20 years or 20 minutes or whether they’ve got one dollar to spend on investment or 20 million,” Mr Stackpool says.
“But not every client deserves equal service and getting that first thing right I think it’s crucial.”
Ms Fuchs adds that once an adviser has identified their active clients, they need to try and break down where the advice is of value to them.
“The business [needs to] take stock and actually identify those clients in the business and the commonalities between this group of ideal clients,” Ms Fuchs says.
“Once they understand what the commonality is they can replicate what they have done with those successful clients across other parts of their client relationships and new clients.”
Ms Payne adds that planners “are finding that the experience of doing business is almost as important as the business itself.”
“I would suggest all planners do is step back and look at their processes, not just from an efficiency point of view but from a client experience point of view,” she says.
“Break it down into each of the different steps and think about how the client typically feels at this step, and how do you actually want them to feel.”
With competition in the area of advice increasing, Mr Stackpool recommends that advisers look to “do things differently” with clients in their annual review meetings, in order to improve engagement.
“I don’t think we can just review the current situation and I don’t think we can go into the same rapport-building chats. I think you’ve got to have a much, much deliberate engagement,” Mr Stackpool said.
“[Advisers] have got to go back to what we call the ‘outcomes’ conversation on what are you basic financial motivators.”
“They are beyond things like holidays. They’re quite detailed statements about what people want to try and achieve with their lives,” Mr Stackpool says.
Ms Fuchs said that studies have found that tailoring communication to clients rather than a “cookie cutter” approach leads to improved engagement.
“Everyone likes to have regulator contact but the contact has to be specific to their stage in life and be personalised- it can’t be generic,” Ms Fuchs said.
“It’s not rocket science; [it’s] just customising and personalising the client experience so they feel special and therefore that the advice is actually for them.”
Practice what you preach
A highly positive client experience can, however, be eroded by poor back office procedures. Ms Fuchs recommends advisers ensure that “housekeeping happens every year.”
Ms Viskovic said that in her experience business plans are “consistently poor” and that it important for businesses to realise there isn’t a one-size-fits-all approach to managing a practice.
“Either [advisers] don’t have one at all because they don’t know how to or they’re forced to do one but it’s 20 pages long and it doesn’t actually drive any focus or motivation in the business,” Ms Viskovic said.
“We would suggest[you] have a really good honest look at your business and see what you’d like to do better, then build your business plan by defining where your starting point is; where do you want your business to be in 12 months?”
According to Ms Payne, having a long term plan can really help drive a practice but that planners need to break this vision into smaller, achievable goals.
“There are so many [planners] that go along blindly which is why they never get to where they want to go, because they don’t know where they actually want to go,” Ms Payne said.
“A planner’s role is to help their clients plan for their future so in terms of them practicing what they preach, it gives them far more credibility.”
Your best allies
The other key tool in a financial planner’s kit is their staff and Ms Payne says that just as advisers need to form a relationship with their clients, they need to form a similar relationship with the people who work for them.
“The beginning of the year is a really good time to really get to know your people, so you should be] sitting down and finding out what they do, what their goals are…. and motivates your people,” Ms Payne said.
Ms Viskovic said that involving for staff is an important way to keep them on board.
“Doing the things that you would see in a corporate environment that often don’t happen in a small business- even something as simple as doing staff reviews [and] taking the time to sit down with them one on one,” she said.
“When staff are involved in the vision of where you want to go in the business they do tend to be more engaged … in actually doing the new things that you want to do in the new year.”
“If it’s just the adviser or the business owner’s New Year resolution and no one else has got behind them then you’re going to be pushing up hill all year.”