I came across a very interesting tweet recently. It was addressed to a highly respected financial adviser and read as follows: “I’m a struggling Financial Adviser who regularly wants to give up until I hear you on the radio.” The adviser responded: “Financial planning is an awesome career where you get to change people’s lives for the better. It takes patience to build up your practice but once you are established you will never look back.”
One of the most rewarding aspects of working with advisers is being able to assist them with improving how they work in such a way that it allows them to extract greater value from their businesses. This applies equally to business owners and advisers operating within a practice. Extracting value comes in different guises, some of which may include:
• a sense that clients trust their adviser because there is a value proposition supported by a process that enhances the customer experience • having clients who have peace of mind because they understand their financial situations • the realisation that it’s less about the money and more about people • having a profitable business that is operationally sound and sustainable • realising the potential to build an income stream that will afford a business owner the opportunity to exit the business financially sound
For me conversations with advisers often revolve around not only understanding what drives them but also what keeps them awake at night; the pain points they experience. Figuratively it means holding up a mirror in which they take a good, hard look at themselves and the way they operate. Asking the right questions and simply listening is often hard work, but also leads to wonderful stories of success.
Working on a business is just as crucial as working in a business. The trick is to know and understand which function is being performed; because being an adviser and being a business owner are two distinctly separate functions that each deserve dedicated time. And yes, being an adviser within a practice also requires being a business owner in a sense.
So, what aspects should an adviser focus on when assessing his or her business? Apart from the obvious bottlenecks and any signs of dissatisfied clients, there are a number of aspects that may be worth examining. While it is impossible to go into each item in the necessary detail, a brief overview may get the mind ticking.
Firstly, is there a clearly defined value proposition? It requires an understanding of the one thing that differentiates your business from the one down the road. Exceptional customer service is not enough. Nor is the production of a financial plan. Ask yourself the following question: What is the one thing without which my clients would not engage my services? That should provide a very good guide to defining a value proposition. I’ve heard it mentioned that if an adviser has never turned away a customer, he or she does not have a value proposition.
Understanding the ideal client profile of a business is another key to building a successful practice. And it isn’t simply ‘anyone with money to invest’. It means segmenting a client base with clearly defined criteria. The results of this exercise are a meaningful step to defining an ideal client. And remember too, advisers are permitted to deal only with clients they like.
Clients experience a business from the first point of contact and this extends into the stage in which they are serviced on an ongoing basis. Having a documented end to end operational process in which roles and responsibilities are clearly defined is of the utmost importance. It also forms the basis for understanding what it costs to onboard clients and look after them. These in turn are of critical importance when constructing service level agreements and implementing a fee model.
Once clients have been onboarded, looking after them by way of a well-defined and documented retention strategy becomes important.
As one adviser recently put it: “The fun part is trying to figure out ways of improving on what we do for our clients. The best part is it’s been good for business.”
By Edden Kift from the PortfolioMetrix business development team. (Edden has extensive experience in the field of practice management and has assisted many advisers on refining their unique value propositions)