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What makes an outstanding advice firm?

Phil Deeks
Another year, another sterling display of excellence at the Money Marketing Awards.
Having been invited to take part in the judging process for the prestigious Financial Adviser of the Year award, I’ve spent a number of hours pondering the question, what are the traits of an outstanding advisory firm?
Here are four areas the more successful firms that entered the award commonly excelled in.
  • Their customers are at the heart of all they do
Customer-centric culture isn’t just a buzzword for these firms, it is firmly embedded throughout their processes, systems and operations. Particularly clear is the commitment to the principles of treating customers fairly, which many have firmly embedded within their culture and consistently demonstrate that its integration goes beyond their advice and controls by recruiting staff whose behaviours and ethos are culturally aligned.
Overall, proposition development is beginning to embrace the shift in working trends and customer’s information needs. Firms are investing in apps and online portals are becoming more prevalent as customers are increasingly expecting online, 24/7 access to their financial lives.
Firms who put their customers at the heart of all their activities have a clearly defined target market, which is regularly revisited to ensure the business activities are continually aligned to their identified needs and objectives. This customer research also shapes their propositions, with new services introduced to meet specified needs, and others discounted (e.g. automated advice) where there is clear rationale, supported by customer feedback, that it is not appropriate for their target market.
  • Staff development is a business priority
The most successful advisory firms we’ve seen during this process are those who invest in all members of staff, not just advisers, with clearly defined career paths that play to the strengths and objectives of the individual. They don’t perform ‘badge collecting’ and not all advisers hold level six qualifications if this isn’t aligned to the needs of their customers. That said, all of the firms recognise the importance of ensuring staff maintain their knowledge and skills through continuing CPD and have developed innovative solutions to ensure it is completed and adds value to them – not CPD for CPD’s sake.
Recruitment of the next generation of advisers is often a common theme for many of these firms, with many long-listed firms operating graduate recruitment schemes or offering apprenticeships. Not only does this provide firms with an additional pool of talented and enthusiastic resource, it also helps the wider industry by raising the profile of the profession as an attractive career for the next generation.
Associated with staff development, another stand-out area was either relocation to new offices or investment designed to develop the existing ones. Designing the working environment to be more inviting, effective and efficient increases staff engagement and helps deliver appropriate customer outcomes. From the submission, it was clear that many firms underestimated the value that such an investment delivers for both colleagues and customers alike.
  • They go beyond ‘advice’ to help educate their customers and for the benefit of wider society 
Many of the successful submissions I’ve reviewed have a stream of activity dedicated to supporting their customers’ financial lives and general awareness, beyond the scope of their advice services. In an increasingly digital world this often includes blogs, social media and videos to deliver educational content designed to help customers better understand and manage their broader financial lives. Many are also involved in delivering seminars within the local community to improve financial knowledge and improve the visibility and understanding of the value of financial advice.
As in many other businesses, charitable giving and fundraising activities form part of firms’ CSR programmes, but one key difference within the advisory industry is the volume of firms actively working to for the benefit of the wider industry or protect against potential consumer harm, whether that’s engaging with regulators or politicians on key issues or engaging in pro-bono or voluntary support within the industry itself (for example, Operation Chive).
  • They are aligned to the FCA’s outcomes focus 

As we’ve seen the regulator move from a rules-based approach to one that is focussed on abiding by the right principles and delivering the right outcomes, the most successful firms are those that have fully adopted this approach and reject the notion of paying lip-service to regulatory outcomes.

Submissions for this year’s awards have highlighted firms’ regular programmes of due diligence on their proposition and the panels and providers they use, with processes in place to critically assess the robustness of systems and controls. As well as creating discrete teams of in-house experts to undertake such reviews, many firms bring in external third parties to provide an independent and objective view to challenge their approach and to get insight into best industry practice observed elsewhere.
All of these measures help ensure the firm’s activities are consistently aligned to FCA expectations and that the right outcomes are being delivered.
A concept the regulator has been promoting recently, particularly in its communications, is around the fair treatment of vulnerable customers. Specifically embedding such a process that provides freedom within a framework, where staff are provided with the knowledge and autonomy to make appropriate adaptations to accommodate the customer’s individual circumstances, while still upholding the spirit of the regulations. Firms that have successfully implemented this approach are reaping the benefits of greater customer satisfaction, positive outcomes and improved staff relations and this came through in a number of the submissions.
Obviously, these aren’t the only factors that make an advisory firm successful but hopefully by analysing the traits common to those who appear on industry award shortlists, other industry participants can gain some insight into best practice and a new perspective on delivering the right outcomes and meeting regulatory expectations.
Phil Deeks is technical director at TCC

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