Article courtesy Mark Lewin, Back Office Hero.
With The Banking Royal Commission an important but fading memory and with most planners having completed the FASEA exams, it is now evident that planners will spend more time on the Discovery Process with clients to remain out of the crosshairs of their compliance auditors. Before and after the delivery of an advice document, planners are getting better at understanding what is required to run an efficient, profitable and compliant business. These include:
- Performing the initial qualification process – Before a relationship develops, you want to know, initially at least, if your prospect fits your Ideal Client definition. Tremendous cost savings can be found by quickly establishing that the prospect requires the type of advice that your practice specialises in.
- Completing the Discovery process – This now can entail two or more meetings as you record why the client has approached your business, understand their goals and objectives and have the client agree to the scope of work to be performed.
- Strategy formulation – Many planners now choose to complete the Discovery Process and propose completing a Client Service Agreement (CSA) before any planning strategies are considered. By having the prospect sign a CSA, you have answered at least one crucial question – will they pay your fees?
- Efficient data collection – You have now researched existing super and investment funds, personal insurance policies and estate planning documents. You have extensive file notes, diagrams and PowerPoint presentations that form your Best Interest Duty obligations, and all of this data needs to be collected and stored efficiently.
- Producing a Statement of Advice – You have established a reasonable repour with your client, who agrees to the planning writing requirements of your office. The CRM is used again to manipulate your collected data to create the Statement of Advice.
- Presentation of the advice document – You have used technology to present the concepts, recommendations, projections and fee disclosures so that the client feels confident to make a decision.
- Your new clients sign the Authority to Proceed – They may also sign a slightly different CSA, and now your back office staff proceed with the lengthy task of implementing the advice.
The time taken and the costs involved to onboard a new client demonstrate why business owners in 2023 and beyond require an efficient business system to survive commercially and enjoy their occupation.
Efficiency is achieved via your ‘business system’ components that you tweak and improve each year. Well-run businesses are characterised by the tools, checklists and technology developed to achieve operational efficiency. Let’s list some of these components as a checklist for your own business:
- An Ideal Client definition tool.
- A prospect qualification checklist.
- A cloud-based business management system.
- An appropriate CRM.
- Protocols on how to store data in your CRM.
- Meeting Checklists to achieve consistency.
- An electronic fact finds that it is compatible with your CRM.
- Tools to assist with scoping and goal recording.
- A risk profiling tool.
- An electronic smart board to present your tailored Discovery Meeting presentations.
- An outsourcing partner to manage menial and repetitive tasks.
- Templates to assist with digital file note recording.
- Checklists within your procedures to reduce human error.
- An SOA wizard solution or an external paraplanning service solution.
- Best Interest Duty filing protocols.
- Implementation procedure and checklists.
Please note that the components above can almost be doubled again as we move into the annual servicing of your existing clients:
- The annual review document procedure.
- Outsourcing of the completion of the review document.
- Your smart board annual review presentations.
- Templates and checklists for the annual review meeting.
- Conducting Team Meetings.
- Constructing your Business Plan.
- Constructing your annual Information Memorandum.
- And many more procedures, checklists and templates.
Let’s not avoid the elephant in the room either – outsourcing the investment solution. Managed accounts have now come of age, and there is no denying the positive impact on administrative efficiency, including:
- The provision of monthly, quarterly and yearly portfolio reporting.
- Professionally managed outcomes.
- Investment control via mandates.
- An approach to match your investment philosophy.
- Portfolios for short, medium and long-term time frames that fit client goals.
- A saving of up to 17 hours per week[i].
Back Office Hero would place managed accounts in the 3 top efficiency measures of the last ten years, besides outsourcing administrative tasks to Asia and the improvements in administration platforms.
Finally, the development of your business system, with the associated efficiency gains, allows you and your staff to engage in the most significant activity to improve profits and increase the enterprise value of your business - deepening client relationships.
Only when you arrive at this point does the real magic happen?
To learn more, contact Mark Lewin at Back Office Hero.
Mark Lewin
www.backofficehero.com.au
[i] Source: March 2022 SPDR ETFs /Investment Trends Managed Accounts Report