Financial Advisory

Financial Advisory

Expert: Mark Hopcroft, Embark Group                                                          ishare-blackrock-logo-360-x-120-correct-28-2-17.png    embark.png

Facilitator: Pollyanna Harper, BlackRock iShares


This session focused on business planning for the busy Chief Executive. You are so caught up in the day to day that you don’t have time to think about what is coming down the line.

It was agreed that step one should be to establish a clear structure for how you run the business.

Areas to focus on:

  • Digital 
  • Qualifications
  • Regulation 
  • Removal of bias 
  • Client segmentation and specialisation - why you work with who do you do.

What are our priorities? 

  • Do you have a five year vision?
  • Do you understand what markets you operate in and why? (As an aside it was mentioned that according to Deloittes, by 2020 the assets in drawdown will have trebled.)
  • How do I keep what I have?
  • How do I come up with propositions which are appropriate? (Beware the law of unintended consequences if you do not think things through.)
  • Who do I work with? The medical profession; the Millennials; the At Retirement market.
  • How do I see more of these people?
  • How do I open the back book – those you cannot afford to engage with? According to the Regulator, some 5.5 million have been removed from the financial advice process.  How do you agree to engage or disengage from these clients? The amount of data held on clients is huge. Under GDPR, you need to have a positive affirmation that you can market to them.
  • How do you align solutions - is it a joined up proposition - end to end?
  • Developing the next generation of clients and developing your people - how do you bring them on?

So the question is “how do you go from spinning lots of plates to controlling said plates?”

  • If a client asks you to look after their child’s £5K ISA, it is difficult to make it cost effective. 
  • If your growth is organic, it has to be an iterative process. You have to take people with you and get shareholder buy in.
  • Can you afford sufficient scale? Do you go down the route of bundled pricing? Do you seek control over investment management?
  • “To think about business you need to look at external businesses.”
  • One of our group was rather negative: “The incompetence in our world is staggering. Best practice is the norm in external businesses. There is a lot we should have sorted by now.”
  • A more upbeat member: “As a consequence of RDR, the quality of management is much better.”
  • The word strategy can have so many different definitions.
  • 5 or 10 year vision is key – there may be “little waves crashing on the shore” but the vision remains in mind.
  • One of the group said: “We are financial planners not CEOs...  you need to bring in professionals around you.”
  • “You also need a team of people who think differently from you. However you need a “doer” not someone who will tell you the problem but fail to solve it.”
  • You also have to ensure you know what the clients want. “We can no longer be gatekeepers for all the secrets. They can go online to check. They want stuff quicker.
  • “Client attrition rate is the same as the mortality rate. If you don't replace the ones who have died.” 
  • The group then talked about big data – how it can be aggregated and interrogated. We then talked about all those clients you cannot look after. These are considered to be those with less than £150,000 in investable assets.
  • The question is – can you offer them a service for 30 bps? Is it worth it? Can you turn them off?
  • “Is it worth re-engaging with that filing cupboard.” Our speaker believes this space is worth going after. However it was pointed out that these clients may appear on 5 or 6 different firms’ databases.
  • 26% of business in financial advice is coming out of the “filing cabinet”. When asked what people were charging – they said 3% + .5% - not an ongoing service fee. “You are available if they want you.”
  • “You should focus on profit centres and clients.” 
  • “You are in business and incidentally you are in FS.” “Is the plate you are spinning going to enhance the client's experience or not?”

Some general comments:

“Attrition - clients do leave if they are not looked after properly.”
“Moving to fixed fees from time recording. People don't like change.”
Groans about the regulatory burden. “Professional regulators and their incompetence.” However ….
“GDPR - should be looked at positively. Mind that data and get the best out of it. Let's turn it into a positive.”
The upbeat comment: “The thank you from a client is key.”
And to end on a really positive note: “By setting bigger and bigger goals, I have quadrupled the number of staff.  We have now taken on an HR director. My passion is to drive change. It is building the future plans which inspire me.”