The most valuable advice businesses in the world focus on achieving the following headline indicators:
1. adviser face-to-face time with clients, prospects and alliance partners of at least 60 per cent;
2. client satisfaction whereby 90 per cent of clients rate the business’ service as world-class; and
3. profitability tracking above 35 per cent.
One key way to push your business closer to these target figures is to outsource your non-core services (those outside a core competency of client relationships) to other providers, and this includes partnering effectively with your institutions. The other key way is to tap into technology. Technology allows you to make your business more productive, and thus more profitable and potentially more valuable. It does this by allowing your team to spend as much time as possible with clients and by ensuring every touch point with a client is personalised and exceeds their expectations, and all in a cost-effective manner. The extent to which the incorporation of technology can lead to a more profitable business is evident in a recent analysis of Strategic Consulting and Training’s Dashboard data. We isolated a group of firms that had developed their business models to allow their advisers to spend 70 per cent of their working time in front of clients, prospects and alliance partners (average client-facing time across all firms in the Dashboard database was 34 per cent). This group of firms were generating net profits of $239,566 (before tax, after notional salary package for owners, before depreciation and before amortisation) per working owner. Compare that to the average net profit per working owner across all firms of $120,112. That’s more than twice the net profits. If we make the assumption that the incorporation of technology can allow advisers to leverage their time more effectively and achieve greater face-to-face time with clients, then you can appreciate further the potential impact on profit.
We categorise technology into four categories:
1. Client-related tools: technology your clients come directly into contact with, such as email, the web for account information, communication tools and e-zines;
2. Productivity-related tools: technology designed to enhance your efficiency and productivity, such as customer relationship management software, digital voice recording, voice recognition, document management, paperless office technology and web conferencing;
3. Technical support tools: technology that provides your financial services solutions, including your back-office platform, financial planning software, portfolio management and reporting software; and
4. Time management tools: processes and technology that help you get the most from your limited time.
One business that has invested a lot of time in the development of client-related technology is QInvest. Peter Gray, an adviser within QInvest Private Clients, who is a participant in our Cultivating Advice program, believes it is all about ‘touching’ the client when delivery of significant value counts. Gray is a big believer in industrialising communication with clients to ensure each contact is valuable and timely, and that each QInvest Private Client receives at least 28 contact points a year.
He believes there are two categories of communication with clients – those that are known (planned) and unknown (unplanned):
1. Known communication types include:
a. Core service provision, such as client events, newsletters, quarterly reports and other standard services required for all clients. At QInvest, document production technology supports completion of these tasks.
b. Personalised service points. At QInvest they respond to these events in a timely and meaningful way through a tailored thread of tasks unique to each client.
2. Unknown communication, that is, touch points you don’t know about in advance that may be brought on by a change in legislation or in market conditions. It’s here Gray thinks a business can really distinguish itself by building a data warehouse that can be interrogated to list the clients that are potentially impacted by the changes.
QInvest has developed a web-based advice model that allows the delivery of advice in the comfort of a client’s home office. The web interface permits the client to view and experience the same calculators, white board and explanations as in a face-to-face contact. The flow from one function to another is controlled via a web interface that reinforces the brand attributes and polishes the presentation. QInvest is also seeking to provide clients with an electronic storage facility where important documents pertaining to advice are stored for the client’s easy access. Gray warns that it is important to provide a ‘one system’ solution because a great deal of time can be spent attempting to optimise a number of technology solutions in a busy practice. The challenge to optimise the benefits of software increases with the number of software applications employed.
So, as a business, do your due diligence and determine the ‘high value’ technology that will deliver the greatest efficiencies to the business. Work with your provider to maximise the use of your system, ensuring each piece of the puzzle connects. Finally, aim to outsource anything that can be done, in the main, as well as if your business did it in-house.
