Drive Seat. How to boost productivity and efficiency

Financial Advisory

24 November 2022

AdvisorsAdvisory DistributorsClient ExperienceFinancial AdvisoryproductivityRelationshipsTechnology

Expert: Leo Niers, Head of Client Training for Europe and Asia at Capital Group Facilitator: Richard Parkin, Founder, Richard Parkin Consulting


Improving overall adviser efficiency is focused on the following five key areas:

  1. Defining measures of productivity (e.g., revenue per client, clients per adviser etc)
  2. Identifying where time is spent
  3. Defining Real Relationship Value to identify the clients that are most valuable to the business
  4. Creating a segmented service offering that ensures delivery is aligned with client relationship value
  5. Having client conversations that are well structured and deliver value to the client and the adviser


Capital has developed a range of easy-to-use tools to help adviser firms work through this process, which delegates worked through as part of the discussion. This threw up some interesting talking points:

What defines relationship value for firms?

Revenue is clearly a big determinant of relationship value, but several other factors are important.

One that was suggested was alignment of the service a client was asking for with what the firm wanted to provide, with firms clearly preferring to work with clients that were aligned with their business model.

This opened up a discussion about whether it should be the firm or the client that determines the service that is provided?

Clearly, firms shouldn’t be providing and charging for services that clients don’t need but at the same time clients shouldn’t expect to be able to access services without being prepared to meet the cost of that service.

Overall, participants felt that it was for the firm to decide what services it was prepared to offer (and at what price). Clients could choose from those services but would ultimately have to look elsewhere if the firm didn’t provide what they needed.

How are clients segmented?

The proposal was that clients are segmented on Real Relationship Value, and that the service offering for each segment is defined against that value, so that firms’ costs are aligned with the revenue that is being generated.

While most firms were segmenting based on some measure of relationship value, it was suggested that segmenting by client need was also helpful. One might have a client with significant levels of wealth but who only wanted a very light touch service.

This highlighted some of the challenges from the previous discussion. Clients should clearly be able to select the level of service that they need but it should also be priced fairly. This is a challenge with the ad valorem fee model. Clients with complex needs may not generate sufficient revenue, given the costs incurred, whereas wealthy clients with simple needs could end up paying far more than the costs they incur.

The role of technology in delivering productivity gains

One participant highlighted the challenge many adviser firms face with the time taken to put together annual reviews for clients. Through the use of technology, his organisation has managed to shorten the production time for annual reviews from nearly a day to under an hour, which has had a huge effect on the capacity each adviser has to take on new clients.

This discussion also raised the issue of adviser attitudes and behaviour. It was suggested that older, more established advisers might be happy managing the size of client bank they already have and any increase in capacity might not result in a growth in client numbers. Meanwhile, newer, younger advisers might be more likely to take advantage of greater capacity to grow their earnings more quickly.

Having valuable client conversations

The session closed with a discussion of what constitutes a valuable client conversation, a topic that came up in other round tables during the day. One participant pointed to FCA research suggesting that 80% of advised clients measure their adviser’s value based on investment performance.

Key takeaways:

  • While advisers can, and do, add value through investment strategy, most see the value they bring extending beyond that to helping clients achieve the life they want to live

Tying the value of advice to market performance that is outside of an adviser’s control is clearly not a resilient strategy, particularly if we are entering a more challenging investment environment