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Points of review

Future-proof your business with a carefully planned and executed client review service which you can tailor to your needs and capabilities, ensuring that you retain your clients by adding a tangible value

Having a client-facing structure for reviews is one thing but if we are going to deliver this service consistently year in, year out, it has to be supported by a systematic approach in the back office. Having a clearly documented process that describes all the potential steps required to deliver client reviews efficiently, with clear accountabilities for every stage and every step, is essential.

Breaking the process down into pre, during and post-meeting phases helps enormously and, in an ideal world, the adviser should only be personally responsible for reviewing the file before the meeting, the meeting itself and dictating post-meeting notes.

Again, you can tailor this to the needs and capabilities of your own business but there is relatively little work involved in delivering this level of service as long as the process is in place, people are clear about their responsibilities and that the advisers in particular stick to the process. Another firm I work with has improved the efficiency of the client review process by a factor of six simply by developing a consistent process and using their investment platform to provide the required data

The most important aspect of running a review service is to ensure that the process is consistent for all advisers. Variations add complexity and reduce profitability.
By creating the process, you achieve three things:

  • You demonstrate to clients that there is a process, which means that they can see what they are paying you for (crucial for adviser charging).
  • You deliver your promise to clients consistently, which means that you can sell the service with confidence.
  • Your people become familiar with the process and get more efficient because they have a clear, simple, scalable process for them to follow, which means you can service more clients without increasing costs.

Beware over-engineering

Many advisers feel they have to provide the client with lengthy review reports full of graphs, charts and fund fact sheets (which most clients do not read). This is often the result of a genuine desire to deliver outstanding value to clients and to justify the charges (in their minds, not the clients).

Ask your clients which bits of documentation they value. You might be surprised at the response. If they want, read and value the 50-page report, by all means provide it but I suspect clients like that will be in the minority. What clients really value is the face-to-face discussion with their adviser. You will also free up valuable time to focus on areas that allow you to deliver an excellent service to even more people.

Drive down management of the review service and make it a process that is managed by your administration staff. Once the process is built, your involvement will be in doing only the high-value, added tasks such as seeing clients, writing up file notes post-meeting and handing out follow-up tasks that come from it. You can then spend more time with other clients and marketing your practice to the outside world, to professionals and the media.

Know what it costs to deliver

One word of caution. It is very easy to underestimate the cost of delivering client reviews. Every week I see examples of advisers doing face-to-face annual review meetings for clients who generate nowhere near enough recurring income to justify the service. A couple of weeks ago, I was working with an adviser client and we did a quick calculation of the time it took to prepare for, deliver and follow up on a client review based on appropriate hourly rates for the staff involved (including the adviser) and we very quickly got to £900. While those hourly rates had profits factored in, it certainly demonstrated that there is a level below which face-to-face annual reviews are the equivalent of a bonfire of £50 notes.

What happens once the rev-iew service is established?

Client satisfaction increases dramatically. The biggest criticism of our industry is that an adviser sells a product to a client and then never calls again. The review process eliminates this problem.

You can work with more clients and still be effective. By creating a process, you free up time. Under the oldstyle model, the quality of client reviews suffers (or they do not happen at all) due to the pressure of finding new clients.

It makes your business future-proof. It will take a lot for clients to leave you once you have built up their trust through a regular review service. They will not want to start again with another adviser. Also, while under the RDR proposals, recurring revenue from pre-2012 business is ringfenced, any recurring revenue for post2012 advice is conditional upon delivering a tangible ongoing service.

How confident are you that the FSA will not come back and review the position in respect of pre-RDR recurring revenues? It would not be the first retrospective review we have ever seen, would it?

You can increase the fees you charge for the service. Once you deliver something tangible that adds value for clients, you can charge what you are worth for the service you deliver. Once the service is up and running and clients provide you with positive feedback, your confidence in the value you add will grow. That is also the perfect time to ask for referrals.

Steve Billingham, Director, Steve Billingham Consulting


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