I have never forgotten Gary Player's famous quote “The harder I practise the luckier I get.” You can translate this into “The more meetings I have the more business I write.”
It is not quite as easy as that. Simply practising harder will not improve your golf unless your practice is focused and of a high quality. Likewise,it is important to have plenty of meetings with good quality clients or prospects on a basis that is highly likely to be profitable.
In the last few years, it has been easy to make excuses for writing less business due to stockmarkets falling, increasing regulation, poor media coverage, falling commission, etc, etc.
However, change always presents opportunities and these are in abundance at the moment. For a start, advisers who have looked after their clients for many years have a ready-made and loyal client bank.
Classify your clients into A, B, C and D classes and arrange as many review meetings with your A and B clients as possible.
Have an agenda for each meeting and make sure you have up-to-date policy summaries and valuations before each meeting. There are endless opportunities for rebro-king and portfolio reconstruction these days. Policies can be rebroked either for a lower-charging contract, a plan with better terms and conditions or one with better future performance potential. The increasing popularity of asset allocation, portfolio rebalancing, manager of managers, wrap
accounts, follow the fund manager, lifetime cashflow planning, financial plans, etc give ample opportunities for reconstructing clients' portfolios.
Once you have arranged your meeting with a good client you know you probably have a potentially profitable case on your hands. But you also know it is speculative because you can easily spend hours preparing for the meeting and the client can still say no. That can mean the waste of hours of your valuable time. So why not guarantee to make your meetings profitable? How do you do this? You tell your clients that you are now fee-based and get them to sign your fee agreement before you do any work. This can be harder to do for existing clients than prospects because you may have earned a significant amount of commission from that client in the past. In our experience, most clients or prospects do not mind signing a fee with commission offset agreement, especially when they know the commission is likely to cover the fees if they proceed with your advice. This is the significant point because if they do not implement your advice you still get paid. This guarantees you will be paid for your work either by fees or commission.
How does this change your life? Completely.
Why? If your client does not sign your agreement you do not have to waste time doing speculative work. The time you save can be spent working for clients who do respect your time and your advice because they have signed your fee agreement.
The result? Natural client selection, meaning clients who trust and respect you and who are prepared to follow your advice and pay for it. You will lose clients who do not respect your professionalism and your time – the time-waster type of clients. Isn't that great news?
Looking after existing clients is unlikely to be enough for most firms as there will always be some loss of clients. What you need is a marketing machine to give you a supply of new prospects and select the ones you want to work with. Remember, it is a natural client self-selection system when you are fee-based.
We work in a great profession and I am proud to be involved. In the years to come, we will become increasingly recognised as the leading profession in the UK. Let us really go for it and look to the future with great confidence and remember, when your clients ask you: “How's business?” you always reply: “Business is great and we are looking for more”.
Tony Byrne is managing director of Byrne Williams