Understanding your client is now more critical than ever
A client needs to value every moment with you, so your time needs to be spent working with them rather than worrying about your admin, writes Bruce McKee, industry development, Financial Markets at Microsoft UK
The problem with a business model change – such as was enforced on many adviser businesses by the RDR – is that it is difficult to understand what the impact will really be until you see it yourself. It will all look fine on paper but, in a people business, the reactions may not be as expected.
One of the major steps implemented by advisers has been the segmenting of their client base; who is profitable, who is not? Who may become profitable as they get closer to retirement or as their business expands? Who will get a reduction in their service commensurate with their investments? What are the service models for these clients? Is it high touch, light touch or electronic only? Does service for high value clients require an electronic channel as a matter of course and what impact does that have on your back office? Where is the value demonstrated? Is it at the end or is the advice the value? The skills required for a product sale are different to a consultancy-based sale. Do your front-office staff have that ability to sell the value of the advice before and during the fact find and risk assessment?
This is where standardisation is your friend. Some advisers will inevitably be better at this than others. By templating the approach of the successful, best practice can be shared and implemented in a consistent fashion around the business.
The performance of your business relies on cost, compliance and conversion. The cost is obvious, if you are giving away time for free, and in the new world time is money, then profitability is reduced and costs are out of kilter with the risk/reward and the capital investments made in your business.
Compliance is non-negotiable. It is not just about being compliant, it is about demonstrating how and why you are compliant over time. All emails, meeting notes, fact finds, risk assessments and other significant documents need to be stored and retrieved quickly. How does it look to a client when a previous fact-find or risk assessment is not immediately to hand when they phone up out of the blue? How does it look to the regulators if you cannot furnish them with the required information on demand? The answers are: Poor customer service and expect more regulatory oversight.
Conversion of clients
Conversion of clients, from one product to many products, comes with experience, time, and trust. The experience of a client over time, if it is positive, will generate trust, thus leading to quicker conversion times and more business. Whilst it can be argued that the initial work, therefore, is less profitable (fewer billable hours spent with the client), it is easy to understand how this relationship will lead to a happier client and more business in the medium to long term. Once a client has made a decision to work with an adviser, they are emotionally invested in the relationship as well.
So how should you approach this?
Understanding your client is now more critical than ever. A client needs to value every moment with you, so the time needs to be spent working with them rather than worrying about the administration required to support the adviser- client relationship. The process needs to flow, with all data captured at the point of advice, rather than brought back in a range of illegible scrawls that need to be re-keyed. Bear in mind you may need these in the future for compliance purposes. This standardised approach, that drives best practice, can be built using workflow to guide the adviser on the next step of the process, ensuring compliance. Workflow should assist in the process without hindering the engagement. The process should be something that others can see and be able to pick up the engagement if necessary. Furthermore, having central process control, enables an updated process to be deployed around the business and drive a new question, questions, or an entire document and sign-off process with complete adoption and compliance. All of this has to happen in a system that is intuitive, self- explanatory and integrated.
The Microsoft Dynamics CRM platform is just that. It integrates easily into Microsoft Outlook and tracks emails, meetings, and documents whilst driving a consistent approach to managing clients. It is a central repository for all client data, but more than that it is a tool for managing your business, as it is a solution platform. This means it is one system that can have many uses. We typically see 10 to 15 applications built on the platform that can support a range of business functions.
Managing service delivery
The last point – managing the service delivery over the course of the year – is an interesting one when considering the changes necessary to run a successful IFA business. In the past, advice was given, products were bought and commissions paid. Today, hours need to be billed and a service delivered. The interaction is no longer the selling of a product at a point in time, but the delivery of a service over the course of many months, paid for at an agreed price. This requires a consistent approach to prompt the adviser to deliver the specified service as required. This could be a review of the financial affairs of an individual, or help to nudge them to save at the end of each quarter. The point is this needs to be a tailored service delivered in a standardised manner. If it is not standardised, it is not scalable, it introduces risk, and has the potential to disappoint the client. The technology solution to this problem is simple, it is configured workflow powering the alerts and processes within Microsoft Outlook.
Whatever happens over the next 12 to 18 months there are likely to be fewer advisers and fewer advisory firms. The assets at point of retirement won’t change significantly so there is a great opportunity. Advice will be needed and the IFA community is ideally placed to drive the relationships and provide that advice. But the new regulator will focus on conduct of individuals and companies. Conduct risk and compliance are critical aspects to running an IFA along with driving profitable business relationships. Microsoft Dynamics CRM can help reduce the conduct risk by enforcing compliant processes and it can drive good old-fashioned business by allowing the adviser to focus on the client’s needs.
TYPICAL USE OF A CRM SYSTEM IN AN ADVISER BUSINESS
• Client on-boarding
• Single view of the client
• Pipeline and sales management
• A view on finance, payments and receivables
• Client billing
• Events and marketing management
• Brochure requests
• Valuation statements
• Web-site for client self-service (address changes, profile updates, information on status changes etc.)
• Routing of information requests to the correct team for RDR and non-RDR products.
• Managing the service delivery over the course of the year.