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Clear move to service
For many years, our firm has been providing lifetime financial planning to the majority of our clients, from protection and debt management to pension and investment planning, post-retirement planning and the passing on of wealth.
However, changing legislation and regulatory requirements such as treating customers fairly, the retail distribution review and the continued volatility in investment markets has prompted us to carry out a full business assessment, looking for the most appropriate way to streamline and improve our client offering.
The review led to the adoption of the Skandia Investment Solutions (SIS) platform - a range of predefined portfolios and a number of other added-value services, such as quarterly rebalancing to the latest asset allocation model, as the core element of our services.
Implementing a detailed service proposition that can be easily articulated to clients has allowed us to move away from front-loaded products with complex charging structures towards customer-agreed remuneration and a straightforward charging structure. The emphasis is now on the ongoing services being provided.
A clear service proposition incorporating the SIS platform means that much of the day-to-day research which in the past was carried out and documented for individual clients is now centralised into a quarterly, internal process.
This has freed up time which can be spent with existing clients, discussing the progress of their planning and any changes to their circumstances and objectives, and with new clients seeking an ongoing advice proposition.
There are several benefits to using a platform from the client’s perspective. Feedback from clients indicates they would like to see less paperwork and, by using a platform, we have been able to achieve the same diversification while minimising the amount of paper used.
Perhaps more important, through our use of the SIS platform, clients seem to have a clearer understanding of what it is we are trying to do for them.
They can see how our service is made up of three distinct elements - advice on how to meet their objectives (that is, the choice of the most appropriate tax wrapper), risk profiling and asset allocation, and ongoing reviews.
Clients also appreciate the freedom afforded to them by the use of a platform with regard to their changing circumstances and objectives, particularly the ability to move between our predefined portfolios in an extremely cost-effective manner.
Renewal commission has typically been the benchmark against which advisory businesses have been valued. However, post-RDR, ongoing remuneration will only have a real commercial value where it is accompanied by a rigorous client review/ service proposition.
Without this service, clients are likely to move to a firm that can deliver a service in line with the remuneration generated.
The use of a platform and the business efficiencies that affords us has enabled us to build real, long-term value into our business.
Ian Jarvis is managing director of Bateman Jarvis
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