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Diary of an IFA: Business bottleneck

In our articles charting transitions in the RDR era, Plutus Wealth Management co-founder Georgina Partridge talks about the effects of renewed client confidence.

Business is brisk. The client managers are happily bringing in lots of work as the general public becomes more willing to come in and have a chat about their money. In the last 12 months, they have been very reluctant to do anything but now confidence is improving and there is a real willingness to talk about their investments again. They are looking at the interest rate they are getting on their cash holdings and they know they need to do something with it. We are also getting plenty of referrals from existing clients.

This is great for Plutus and we are thinking about doing a seminar over the next couple of months to capitalise on people’s enthusiasm. However, it has also given us some problems. Specifically, it has created a bottleneck on the transactional and administration side of the business. We take a consultancy approach and refer clients to specialists for different parts of their financial planning. This influx of business is adding real pressure to the already burgeoning workload of our specialists.

There is a definite need to raise the level of qualifications across the board to provide more fully qualified advisers to take the slack. It is also raising the question of whether we need to recruit further administration support to relieve some of this pressure. We are currently weighing up the costs involved.

We have set ourselves a target of everyone being fully qualified by 2012, so we are just trying to keep on top of the progress of our advisers. Ultimately, they either pass or fail. If they fail, it’s a case of moving onto the next one. We provide our advisers with study days but in general we allow them to manage their revision themselves. We assess the progress of all our advisers every six months.

There is a need to raise the level of qualifications across the board to provide more fully qualified advisers to take the slack

Embracing technology should help us with this in the long run but we are still getting to grips with our new back- office system – Intelligent Office. Finding the time during the day to input all the data to be able to make the system work efficiently is another battle. It forces the advisers to take time away from talking to and seeing clients.

We certainly don’t wish to compromise our client-centric approach and the speed with which we deliver on our service proposition but then we do want to use technology as much as possible to help us do this. It’s a bit chicken and egg. Plutus is open to change but sometimes changes cannot be implemented as quickly as we would like.

I suspect we still have some way to go on this. When it is up and running, we will have real time valuations, product reports and be able to do online fact-finding. We know the system works efficiently, it is just getting the data in there. We had wanted to do it before Christmas. We have another review booked for the end of this month and are very much hoping to have got it done by then.

If you are clear about the types of business Plutus wants to transact, then taking into account the bottleneck, you should encourage advisers to gain expertise in the areas where most business is being generated

We had been planning to revise our service brochure and had had several meetings about it. However, our network came in for a review and really liked it. They said that it was unique and innovative. We will keep reviewing it but we’re leaving it alone for the time being.

The next thing we are focusing on this year and something we are keen to spend time getting right is the development of our investment proposition for our clients. We want to be able to provide active management at a low cost. Many clients come to us already with existing investments, savings, Isas, pensions, endowments all of which have used different measurements in assessing their risk profiles and all seems to have been done on an ad-hoc basis. We want to streamline our system so there is consistency across the board. We want to be able to provide our clients with a profile and portfolio that accurately matches their needs. We want to ensure that two clients with the same risk profile will get the same portfolio with different advisers.

Part of this is making sure that everyone is talking the same language. We don’t want to say baldly: “This person is a medium risk and so here’s a balanced fund.” We recognise that medium risk can mean very different things to different people.

This will be our main project for the next few months. In the meantime, Plutus will be working its way through all the challenges of technology and qualifications.

The consultant’s view: The Challenges of a growing company

Your update certainly paints a picture of increasing activity and business, which is positive. At the same time, it is very evident that you are experiencing some of the challenges that most growing businesses face. Better to have them to address than to be worrying about the lack of business coming in through the door. Dealing with each of your points in turn:

I suggest that you need to look at the cause of the bottleneck, which may not simply be too much business but rather too much of the wrong type of business. Different types of business require different levels and types of resources. Also, analysis of the source of your leads as well as the types and cost of transaction will pay dividends.

You may conclude that the solution is to consider increasing the number of specialists and admin staff but this decision needs to be validated first by research and facts to support the expenditure.

Achieving level four status
Ensuring that your colleagues achieve level four status in good time before 2013 is paramount to the future success of Plutus and regular review and coaching is also vital. I would suggest that six-monthly reviews are too infrequent and that you should reduce this interval to three monthly. Some of your colleagues may want and need even more frequent support.

A further point worth careful thought is the combination of subjects being studied by each person. If you are clear about your proposition and the types of business Plutus wants to transact, then taking into account the bottleneck you refer to, you should encourage advisers to gain expertise in the areas where you are finding most business is being generated.

Any software provider will tell you that strong initial training, undertaken by everyone who is likely to access and use the system, is likely to yield better results in terms of effective usage of and outputs from the system.

The Ideas Lab director Roderic Rennison



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