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Journey of discovery

TCF is the perfect opportunity to embrace change in the industry.

Don’t listen to the “neg-heads” out there. TCF is the best thing that has happened in financial services for the last decade.

Don’t listen either to those shortsighted individuals who think that TCF does not apply to them because their clients have been their clients for the past hundred years or so. That is not what TCF is about.

TCF represents a fantastic opportunity to embrace change and build an advisory firm “fit for purpose” in the 21st Century.

For us, TCF is very much a journey rather than a destination. Our view has always been that while we are proud of what we do, we know that we can always get better and TCF is the way we seek to measure the improvement steps in getting better. It is also something that does not belong filed under compliance.

In fact, we would go as far to say that if your firm has delegated the responsibility of TCF to the compliance department then you are missing the point.TCF is about the complete business culture that exists in a company and how the goals and objectives of that company are fully aligned with the needs and wants of their clients.

So how, in our humble opinion, should TCF be embraced by an advisory firm? The starting point must surely be that the firm has a meaningful and valuable proposition that is worth buying. Frankly, a proposition that starts with “we are an independent financial adviser and we can buy the best product from the whole of market” is about as weak as a proposition can get.

It is meaningless and, of course, is highly dependent upon product sales and not what the client really, really wants which is advice and service. So start by identifying what clients want and then articulate an offering that appeals to them.

This may simply sound like “marketing” but it is a crucial step to ensure that the business model focuses on delivering what is promised to the right people at the right time.

TCF then flows on to systems and processes to ensure delivery of a first calls service to clients and measurable and meaningful service standards. This is hard work and if you are anything like us, it is probably the case that your systems and processes historically were not documented. For us, it has resulted in the building of a procedures manual to help ensure that delivery becomes consistent.

The main challenge of TCF for us that is that we want to provide a bespoke service but have a consistent efficient delivery of that service.

For many firms, TCF starts with some form of client segmentation exercise and this is a tough thing to do. It was particularly noticeable for us that we had many “clients” who simply did not fit with our proposition. They in the main were not profitable clients. Some marketers would say “get rid of these clients” but that does not fit well with our culture of loyalty. Our solution was to identify what we would do for those clients (provide information and updates) but with any further advice paid for. That way we could still support them but engage with them on our new basis for future services.

TCF has helped us create a business model (not yet complete but well on the way) based around a four-letter acronym – EAIR.

Engagement: Where we know our customer and tell them what we will do for them; Advice: Always in writing and presented face to face with the client.

Implementation: Where we put in place new plans or alter existing plans.

Review: Three distinct service offerings, including quar-terly valuations and annual review reports.

TCF is an opportunity to really think hard about how you engage with and deliver services to clients in a profitable manner. TCF, by the way, is owned by you and me, not by the regulator. It is about behaviour and not a tickbox mentality. It is about the whole culture of our firms and how we relate to our clients.

Martin Bamford is director of Informed Choice.


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