I didn’t think I would enjoy working in financial services when I started 6 years ago. I didn’t know anything about the industry. I knew that I was great with technology and great with computers. I was also great at being efficient, questioning and challenging the way things are done.
Financial services requires problem solving, system building and the processing of mountains of information. If you can do this well then you will build a successful practice.
Of course only when combined with an effective salesman.
As Good As Your Systems
Most IFA’s are effective salesmen, but not necessarily effective at building systems.
I worked as a Business Manager and for over 5 years I helped one firm transition from a sole advisor firm under a network, through to buying and fitting an office space and building all the systems to support the transition to direct authorisation.
If you work in the industry then you know how much you red tape is required for direct authorisation.
I want to talk about the things that we put in place that formed the foundation for direct authorisation.
Build a System
The first place that I would always start with is your system. You need a robust system to support the data gathering that needs to happen within Financial Services. If you want to report to the Regulator and provide a great service to your clients you need to make sure you manage your data well.
It all starts with your IT infrastructure, then the types of software that you use.
We used Advisor Office, the jack-of-all-trades product. If you use it effectively you can build a hugely successful practice – we proved that, despite its frustrations.
We also used Distribution Technology, Para Planning Online and Microsoft Office.
It’s no good just having those tools in your armory, you also need to know how to use them. That’s where I came in.
I’m really great at using these tools to streamline processes. Once you’ve got the technology sorted, once you’ve you get your software sorted, you can start to build a really stable foundation for your business.
Live or Die by Sytems
The reality of today’s advising is that if you don’t have robust technology systems, you will not be able to operate at the level you want to operate at.
If you haven’t got those systems in place, even if you’ve got a compliance network that’s giving you systems and processes, those systems are only as good as the user.
You really have to upgrade the way that you interact with systems, not just upgrade systems. So the first place to start is with your technology, with your computers and with your software. Then you need to upgrade the operator’s expertise.
Power in Your Pocket
You’ve also got mobile phones. They’re incredibly powerful. There are many different things you can use your smartphone for. It’s about bringing all those things together to work for you.
Clear Value Proposition
Once you’ve got your technology and software in place, you then have to go on to your service offering:
- Are you getting the best value?
- Are you delivering the best value to your clients?
- Are you charging enough?
We worked on a 3% initial and a 1% ongoing model. We didn’t always charge in that way. We also had fixed project fees although the 3/1 model works really well.
We created a healthy residual income. As we performed better as a firm, as we grew our assets under management we were continuously generating new business income for the work we carried out plus ongoing income to be able to run all the support systems and pay for staff.
I doubt that you can create a really robust system and provide as much value as you would like to if you’re charging less than 1% ongoing. You can challenge me with that if you like. Show me a firm that is really providing huge value for their clients that isn’t just chasing sales that’s charging 0.5%. I believe that the 3% 1% model is a great place to start. It also gives room for negotiation on the initial for high value business.
You also need to be making sure that you are delivering great value to your clients.
Paul Murray used to say to me “in the absence of value, cost is an issue”. So if you’re not presenting and demonstrating your value to your clients then they’re going to question your fees. If people then come to me and say that sounds expensive, I can say “well that depends”. It’s all about the value.
If you structure your service delivery in the right way, people will be willing to pay for a great service. I know this because I’ve done it. I’ve put together reports, I’ve sat in on meetings. If you structure your delivery in the right way and they really see the value in what you do and you structure the introduction of that sale correctly then you can charge clients £12,000+ up front.
People say to me that sounds like robbery, but is it?
It’s not just about the time it takes you to deliver that service it’s also about all the years of experience, all the support mechanisms you have to put in place to actually be able to deliver service to one client. Not to mention the cost saving, stable growth or peace of mind that you offer the client.
So are you charging enough? and do you demonstrate enough value for your clients to justify the fees that you are proposing?
If you’re getting a lot of resistance, or they’re saying it’s too expensive, then I would question how well you are positioning your value to your client.
Bringing it All Together
So you’ve got your systems and you’ve got your software, you’ve got a great value proposition. Then it’s on to actually building the systems and processes to support you.
It’s up to the systems to support the advisor in having time to go out and prospect for new business, to build relationships with people, to do presentations, to follow up with people by phone, to ask for referrals.
My experience was that the better the support structures are at supporting the advisor, the less time they are called to do admin, which gives them more time to be out there creating relationships, making sales and doing what they do best. That’s what every advisor wants to do. They want to sit in front of their clients, they want to listen to them, they want to identify their needs and they want to deliver a service to them that the client values.
All of the things that go on in between, they really don’t want to be involved in. Yet that’s the bit that if you don’t get right will be your achilles heel.
You’ll find yourself getting frustrated and ‘caught up’. Financial Services can be an incredibly frustrating industry if it isn’t done with ease and grace.
How Can I Help?
If you would like to understand how I can help you to identify blockages in your business systems and create more freedom your service delivery then get in touch and let’s have a conversation.
Let’s see how you can improve what you do and earn more money and spend less time in the office!