What Do You Look For In A Service Partner?

The way financial advice firms deliver their services has changed hugely over the last decade or so. Up until then and maybe with the exception of accountancy and legal services, businesses pretty much delivered (or not) all of the required services themselves.

But times have changed, the world of work has become far more complex and the delivery of all of the business services required have moved beyond the capabilities of most advisers. As a result, there has been an explosion in the availability of external partners available to advisers, to assist them in bringing their businesses forward and allowing them to concentrate the adviser’s own time and effort on spending time where they add most value – in front of their clients.

But how do you choose the right external partners to work with?
They must know your market

Whether it’s compliance support, any IT services, sales training, marketing support, business coaching or any supports at all, the external partner must intimately understand the world in which you operate. It ends up as a huge source of frustration for advisers when they end up spending their time educating the external partner on what is needed, not the other way around!!! You want a partner who understands the market in which you are operating, really understands the specific challenges faced by advisers today and also keeps their finger on the pulse of changes within the market.

They set out to achieve your specific goals

At the end of the day, suppliers are businesses too. They develop expertise and a range of products, services or solutions in their chosen area. Yes they will develop common methodologies to deliver their solutions, but that doesn’t mean the end result is the same for every client.

Indeed most financial advisers use a well-developed advice process that they employ in all client meetings. However unless you spend time really understanding the financial goals and objectives of each client, their current circumstances and their attitude to risk, the resulting financial plan will be the same every time!

The same applies to service partners. Make sure that any supplier is not pulling a solution straight off the shelf, but instead is spending time really understanding your business, your specific challenges and the results that you want to achieve.

They practice what they preach

OK, I have to admit that this one is a real bugbear of mine! I’ve seen advisers getting support in areas from people who simply don’t practice what they preach. I came across an example of this recently with an adviser who had paid a lot of money to a digital marketing “specialist” for training in reaching customers online. They were very disappointed by the results achieved.

When they asked me for a second opinion, I did some cursory research on the supplier (who I hadn’t heard of). They had virtually no online profile themselves at all! An out of date website, no LinkedIn presence, no blog, nothing… How can someone teach you about social media when they are a passive bystander themselves?

A provider should be able to show you that they passionately believe in what they are saying by demonstration (where it makes sense), not that they’ve just learned a few titbits to pass on out of a book.

They are not trying to be “all things to all men”

This is another area that bugs me. When I set up on my own a few years ago, I was developing a brochure for a client. I had worked on a few previous occasions with a great printer who had never let me down. Business had got quite tight for him though during the recession and on this occasion, he convinced me to outsource the graphic design work on the brochure to him too. He was a terrible designer and it ended up ruining our relationship.

I suggest that advisers work with people who don’t necessarily claim to be great at everything, just the areas where they can add value. However your external partner should still be able to co-ordinate the complete solution required by you, just being clear with you as to the work they will complete themselves and also the work that they will in turn outsource.

So a partner saying “no” to elements of the work is actually a good thing. It shows an interest in getting the right result for you, not just looking to hoover up every available Euro for themselves, with no eye on the result.

They Can Demonstrate Success

Actual testimonials are a must too. I encourage every adviser to have client testimonials on their website that are real and verifiable. They must be completely credible with the full name and company name / location of the person giving the testimonial.

The same applies to supplier testimonials. You should be able to find credible testimonials on the suppliers website or recommendations (not endorsements!) on LinkedIn from people similar to yourself. You should be able to get a clear sense of the capabilities of the supplier from the testimonials and their ability to achieve the results that you are seeking. These testimonials should give you a sense of comfort and a lot of confidence in the service you are buying.

Are your external partners passing these tests?

Do You Have Any Skills Gaps?

Being a financial adviser today is a complex business. It takes a pretty broad range of skills to be able to carry it out successfully.

So we’re going to start with a basic assumption based on your experience, qualifications and commitment to CPD; that you are capable of delivering excellent advice and financial solutions to your clients. This is what you do day in and day out and without doubt is the reason that independent financial advisers have clearly established themselves as the channel of choice for people seeking personal finance advice.

But what about the other skills that you also need to run your business successfully? Here are some of the skills that you need and the question is, “Are you as good in each of these areas as you possibly can be, and if not, what are you doing about it”?


A leader

Assuming you have people working for you, either in a sales capacity or as support staff, this is your primary function. It’s up to you to devise the strategy for your business, to scan the horizon for future trends and set the direction accordingly.  And then to manage your team and to provide day-to-day guidance to ensure everyone performs to his or her maximum potential, and that your business is being run in a compliant and efficient way.


A financial manager

You also need to manage your business from a financial perspective, ensuring that you are generating the required amount of income via fees and commission to sustain your business and that the profile of this income is in line with your business model. Most advisers today are looking to build their recurring income and the proportion this represents of overall income.

On top of this, you’ve then got to manage your costs that of course come in all (and sometimes unexpected and unplanned) shapes and sizes!


A marketer

You can’t rely on your business to promote itself, except of course by all of those kind words and positive stories that your existing clients say about you having experienced your services! You’ve got to get out and promote it, whether that’s building your brand, growing your own profile, attracting new clients or retaining your existing clients. All of this takes time, energy… and specific skills.


A prospector

The life-blood of all financial advice businesses is its clients. And while there is definitely a shift towards a much greater focus on strengthening relationships with existing clients, many advice firms still require a steady flow of new clients to achieve their growth and financial goals.

So you need well-developed prospecting skills, whether these are seeking out referrals from existing clients, networking among your target clients or developing active relationships with introducers.


A salesperson

It’s funny; this one sticks in the craw of some advisers today, who don’t like to think of themselves as salespeople. I’ve bad news, selling is a key part of your overall role and there is nothing wrong with being a salesperson! At the end of the day, you’ve got to be able to convince people that it is going to be worth their while to sit down with you and find out more about the value that you can potentially deliver. How good is your elevator pitch?


A pipeline manager

Managing more complex and longer pipelines effectively is a significant challenge of many advisers today. Research tells us that clients take longer today before they commit and that it usually takes in excess of 5 contacts with them before they are willing to actually come on board as clients. So keeping people moving through the sales funnel is an important skill, and advisers need to ensure that they are carrying out the right pre-sales activities and persevering towards ultimate success.


A communicator

And then you get the opportunity to sit down with a prospective client and convince them that you are the only adviser in town to meet their needs. To do this, you’ve got to be able to persuasively tell your story, demonstrate your value and convince them that your services are what they require and are definitely worth paying for. If your presentation is not engaging enough, will they see the value of dealing with you and will they be willing to pay for your services? And then you need to keep communicating with them again and again into the future, to gently remind them of why they are so fortunate to have found you!


A service champion

There is so much choice available to us in the world today in every product and service that we seek. This applies to financial advisers too. As a result, clients expect you to deliver a good service. They won’t even particularly thank you for it, as they will see this as a hygiene factor, a minimum standard that you must achieve.

So you need to set the standard in your business, to ensure that your staff are wowing your clients rather than disappointing them with the service they receive.


So back to the question posed earlier… If your skills are lacking in any of these areas, what are you doing about it?

Photo courtesy of Marcin Winchary

Want to Bring Your Business To The Next Level?

While we are currently living in volatile times in terms of the global financial markets and very uncertain times in Ireland politically, most financial advisers that I speak to are still constantly trying to work out how they are going to bring their business to the next level. They know that markets will settle down in time and that eventually (whenever that might be!) we will get a government again.

Advisers are determined to build real value in their business, to move it from being a one-man advice shop to being a real professional services business. So what are some of the big challenges that advisers looking to make this shift are grappling with today?


Focus on your business

Time is one of the biggest enemies of financial advisers. You just don’t ever seem to have enough of it! And as a result, you use this precious resource fixing the problems of your clients, constantly battling deadlines of getting advice reports out, carrying our review meetings with clients, while also trying to drum up new clients.

While at the same time your own business actually gets very little of your attention.

We’ve all heard the well-worn phrase, “Work on the business, not in it”. While it might be over-used, it still has a lot of merit. Moving your business in a structured manner to the next level will take energy, focus and time. So the first step is a backwards one away from the day to day work within your business and instead allocating this time to plotting out what you need to do to take your own business forwards.


Delegate relentlessly

It’s all well and good to talk about taking a step back. It’s much harder to do this in reality… And the reason for this is because all SME owners such as ourselves believe that no-one can look after our clients as well as we can ourselves. And maybe we are right – maybe no-one can look after them as well. But this is only our own fault. Because we haven’t created the skilled teams around us.

Until you build a team around you that you can delegate your day to day activities to, you are always going to be constrained as you try to grow. You will never have the space to spend time on your own business, instead you will be constantly up against client deadlines. Yes this can feel good being flat out, fighting fires. But you’re not moving your business forwards.

The great thing today is that there are so many flexible options in terms of building a support network around yourself. You can hire people today in a way that suits your needs; full time or part time, in the office or working remotely, indeed most tasks can be fully outsourced if you don’t want to employ someone at this point in time. The main goal though is to free you up to work on the business.


Look at your own skills

And then we all need to get honest with ourselves! While you might be a brilliant adviser and look after your clients really well, do you have the skills to actually build a business? If not, what do you need to do? For most people, it may be that some outside help is needed, either in terms of management support, business coaching or other supports. For other people, maybe you are just not the person to bring the business to the next level and you actually need to employ someone to do this for you.

I personally know one (extremely) successful entrepreneur who recognised this very early on his own growth path. A great ideas man, he built a great “early stage” business but quickly recognised that he didn’t have the skills (or the interest) to follow a structured growth plan. So he hired someone to do this, while he “went again” with another business idea. While most advisers are probably not looking to build a number of businesses like this, you might still need help in bringing your business to the next level.

Thankfully there are many examples in the financial advice industry of individuals who have started financial advice business that became successful based on the advice they were giving, and who managed to step back and build strong teams around them. These individuals are now acting like the conductor of an orchestra, leading these businesses forwards on steep growth paths, having removed themselves out of the day to day client facing work.

Of course there are then all of the challenges of developing your propositions, having structured processes in place and communicating more effectively with clients. But if you start by allocating time to your own business, building the team around you and recognising your own strengths and shortcomings, you will be a long way down the road to bringing your business to the next level.

How to Beat a Competitor Offering a Lower Price

You’ve all been there… You meet a very promising prospective client, you have a brief introductory chat but you can see there is an immediate issue niggling away. You probe the client and they say something along the lines of, “Let’s cut to the chase, what do you charge as I’m talking to another adviser who will manage my assets for 0.15% p.a.”?

Assuming you charge 0.25%, 0.5% or even 1% p.a., what do you do?


1. Acknowledge but don’t start negotiations!

The fatal mistake is to start negotiating your price now. After all, the client has absolutely no idea what they are paying for at this stage, and the value that they will get from working with you. Obviously you can’t ignore the question, but the answer needs to be along the lines of, “I can hear that our price is a key consideration for you. Let me set out what we do first as there are a range of different options available to you”.

Don’t let yourself get dragged into a price war at this stage!


2. Go through your normal initial meeting process

This is where you take control of the meeting again. Rewind the meeting to understanding the client’s objectives (through careful, open questioning) and then presenting how and what you do. This is where you set out your advice process, your annual review meeting process and the ongoing service packages that you offer. Assuming you offer differentiated service levels for different segments of clients, your client will now see what you have to offer at different price points. If the client wants rock bottom pricing, well then he / she will see that they won’t be getting a premium service at that price level.

In order for your competitor to offer such a low price, they are probably not promising anything! So the other advantage of taking the client through your approach is that it will demonstrate the significant advantage of working with you as opposed to your competitor.


3. Be firm and brave!

Stand by your pricing as a premium advice provider. Acknowledge that you are more expensive; your client will actually respect you for this. Yes you can have lower cost packages, but within these the client should be left in no doubt about what is included and what is not.

What if the client looks for your premium service package for a lower cost? Well then you’ve a choice to make! Yes, you can be flexible, but I suggest only if there is a good reason… maybe the client is an important access point to an attractive target market, maybe you see broader opportunities with them. Don’t just agree without a reason, or otherwise you will simply start dropping your price at the first hint of a push-back. Sometimes it’s better to walk away, rather than agreeing to a price that doesn’t make economical sense to you.


4. Make sure you can deliver… and prove it

If you want to charge higher prices than your competitor, you have to able to deliver more. So it is very important that you can actually deliver what you promise. The last place you want to end up is the dreaded “over-promising and under-delivering”.

Of course your prospective client won’t have experienced your service at this stage of your relationship. So this is where you need to be able to call upon the experiences of other satisfied clients to add validity to your promises. This is where those client testimonials, LinkedIn recommendations and case studies of previous work come to the fore. They paint the clear picture of what your prospective client can expect.


5. Add value beyond the sale

Finally look to add value beyond the sale. Are there services that you can offer to your client that sit outside of your service packages? Maybe you can provide a willing 2nd opinion on any broader issues they might have in relation to financial planning? Maybe you can give them access to a broad network of business professionals that can help them in running their business? Or maybe you can refer some of your contacts to them as potential clients?


At the end of the day, you’ve a choice to make. Is your competitive advantage based on offering your services at the lowest price, which ultimately will be a race to the bottom? Or can you offer superior value and build your business around delivering this value, at a higher price? The choice is yours!

Are You Worth More Than a Glass of Lemon Water?

When you read a headline like that, some of you might be forgiven for thinking that I’m finally losing it completely! Well please stick with me, because this article is based on a situation in another industry, the restaurant / café business.

This all started with a link that was kindly sent to me by a financial advisor (thanks Eamon!) of an article that highlighted a great response by a restaurant owner to a negative Trip Advisor review. It’s worth reading this article and in particular the response here.

What has this to do with financial planning? A lot really… This response highlights the amount of work that goes into seemingly straightforward tasksthat clients think they should not be paying very much for, if at all. And this is one of the most common issues faced by Financial Brokers today. Your clients simply don’t know the amount of work that you for them.

So what do you need to do? You need to tell them exactly what you do for them. That is, at least all of the things that you do that add genuine value for them!

Then they can start to get a sense of what you are doing on their behalf, and they can start to get a sense of the value they are getting for the charges they are paying. Surely this is better than them not knowing what you do, challenging your costs and you then having to defend and justify your charges?

This applies at every stage of your engagement with a client…

Before they become a client

A prospect lands in your door as the result of a referral or another of your marketing activities. They don’t know what to expect, in fact they may very well be shopping around.

Now is not the time to start diving into solutions for them. Instead now is the time to start building trust with them by talking them through your advice process from beginning to end. To my mind this is best achieved by showing a graphic of your advice process and then talking through every step within the graphic. This will demonstrate the professionalism and rigour of your approach. It will also clearly demonstrate to them what your costs (whether by paid by fee or commission) are for, should they engage you.

When products are put in place

Now this is a stage that is very similar to the glass of lemon water! Clients think there is very little involved here and can’t understand why they are charged for you simply posting a form to an insurance company who do all the work…

With some of the clients that I’ve worked with, we have developed out detailed process maps of each and every step involved in putting products in place. Do you tell your clients about the 25 steps that could be involved in putting a pension in place? If you do, they are now going to fully appreciate what they are being charged for. It will also kill off any thoughts that they might have of taking your advice and trying to implement the solutions themselves…

The ongoing service that you provide

It really makes little sense for you to provide a brilliant ongoing service to your clients, and then not to gently remind them of what they are getting. They need to be constantly reminded of the value that you are providing to them day in and day out, as this is what they are paying you for.

This is really important today as many advisers are moving their clients towards a trail commission based model. As funds increase and the transparency of charges increases as it inevitably and rightly will, clients will start to do the sums as to how much they are being charged. If they are not aware of the value that they are getting for your charges, you run a very high risk of losing them to another Financial Broker who is clearly articulating the value that his/her clients enjoy.

The annual review meeting

This formal meeting offers a fabulous opportunity to cement the relationship, again through reminding clients of the value that you are providing on an ongoing basis. This can be achieved by having a structured, valuable agenda for these meetings and also by setting out all of the “touchpoints” you had with them over the previous 12 months. You might remind them of meetings you had, queries that were dealt with, seminars they were invited to, newsletters they were sent, portfolio rebalancing you did for them etc.

If you do all of these things, can your clients really argue over the price of your services?

The Goals to Achieve in 2016

Time is marching on… we’ve now only a few weeks to go before we start re-setting the business clocks as we enter a new business year. As Christmas approaches, this is a time when many Financial Brokers turn their attention to their aspirations for the New Year.

Some will do this in a very effective way, going through a structured business planning process, drawing up goals for 2016 and ensuring that everyone in the business is focused on the same outcomes. For others, this is all a bit of a struggle! They give a bit of thought to the upcoming year, but find it difficult to capture meaningful goals.

So here goes with a few thoughts that will hopefully make the task a bit easier. We’ll take a look at constructing goals and also what areas of the business you might want to set goals for.

SMART Goals are effective goals

The first point to consider is what an effective goal looks like. Effective goals will help to drive effective behaviours, giving a better chance of better results. I don’t think that you can go far wrong if you check that each of the goals you set display SMART characteristics. SMART goals are ones that are:

  • Specific – The goal must be clear and not ambiguous at all – it must be clearly understood what is expected to be achieved.
  • Measurable – The goal must be capable of being measured so that you can clearly see the progress you are making in achieving the goal.
  • Attainable – The goal must be realistic and fair. If it is completely unachievable, no-one will be motivated to achieve the goal.
  • Relevant – The goal must make sense in terms of the “bigger picture”. There needs to be a clear purpose and reason behind the goal.
  • Time-bound – There should be a specific time period (often the calendar year) in which the goal should be achieved. It can’t just be left open-ended.

So now you know how to set good goals, what are the areas within your business to measure? When you think about it, there are lots of them!

Financial Measures

There is a range of measures that can be used to monitor the financial health of your business. Some of the key ones include:

  • Overall income: Yes turnover can be just a vanity figure, if your costs are exceptionally high. However your turnover gives a sense of whether your business is capable of getting customer traction in your chosen markets.
  • Profit after business expenses and remuneration: This figure is far more informative of your business health, as it takes account of your remuneration and all of the costs associated with running your business.
  • % of income coming from trail / fee/  recurring income: The traditional method of valuing a Financial Broker is as a multiple of recurring income. This metric gices a clear sense of the value of your business.

However beyond the financial metrics, there are many other metrics that you can use. Here is a sample of some of them.

Client metrics

There is a range of metrics that can be used to measure the success of your client activities. These include:

  • Number of clients: this can be measured at an overall level and also within segments of your target client groups.
  • Average revenue per client: this will give you a sense of whether you are building greater value into your propositions and whether you are reaching your ideal clients. Again this may be carried out at a segment level.
  • Average recurring revenue per client: this will give you a good sense of the future health of your business.
  • Number of new clients: always a good measure of whether you are growing as a business or not!
  • Client satisfaction: this will give you a sense of your likelihood to hang onto your clients into the future. Again this can be carried out at a segment level. The Net Promoter Score is a very simple but useful measure of client satisfaction.
  • Risk register: Are there problem cases that need to be monitored? If so, a firm oversight needs to be maintained, both in relation to the number of cases and progress of these cases towards a solution.

Staff measures

Again, there is a range of measures that you can use to ensure your staff are performing to their maximum potential. These include:

  • Sales Performance: This may be based on volume, margin or other relevant measures.
  • Activity: This may be the number of new clients secured, first meetings secured, financial plans completed etc. It is always useful to get a good sense of the activity levels of each of your sales team.

Marketing Metrics

Most marketing activities can actually be measured! Here are a few of the key ones that will help inform your marketing activities:

  • Contact data quality: This might be as simple initially as tracking the number of client email addresses you have secured. Email offers you a no cost method of getting marketing messages out to your clients.
  • Numbers and source of leads: Tracking the numbers and source of new lead is one of the best inputs into decision making around future marketing activities. If it worked before, it might be worth repeating!
  • Website analytics: Google analytics will give you a wealth of data in relation to your online marketing activities and can tell you the likes of;
    • The number of people finding your website
    • Where website visitors came from – Search terms, social media, directly accessing your website.
    • The content that attracts people to your site…. and also drives them away.
  • Social media interactions: Likes, comments, Retweets! These terms are “Double Dutch” to some people, highly valued endorsements of your content to others!

So there are many potential areas to measure! It’s a case of identifying the most relevant ones for your business, setting SMART goals around them and then getting stuck in and achieving those goals…