“Investment updates are not client reviews.”

More than 30,000 of our financial service clients have told us what they think of the services being delivered by their financial adviser … if only we had a dollar for every time we read a comment like the one above!

According to our feedback, the poorest performing area of Australian advisory practices is the adviser’s review service. This response is a bit surprising as over 88 percent of the 1,000 plus practices that have taken our Business Health­Check in the past 18 months state that they have a regular and documented review process.

The disconnect is obvious. Clearly, while the majority of practices do indeed possess a review process, they are not necessarily delivering what their clients are looking for; perhaps this is not so surprising when you consider that almost two thirds of the practices in the marketplace have no structured approach to seeking client feedback.

However, what is more astounding is the differ­ence in return being delivered to practices that do include a set structure to the review process.

As shown above, the principals that have a documented review process earn, on average, over $100,000 more profit than those who do not.

So what are the attributes of an effective and valued review system?

1. Client Focus

First and foremost (and at the risk of stating the obvious), a client review must be centred on the client. This means focussing on the client’s goals and objectives and basing the review discussions on what is most important to them. If the review pro­cess is nothing more than an update on product or investment performance, it simply isn’t going to be sufficient to satisfy the needs of today’s client. After all, this type of information is now readily available through both the financial and mainstream media.

2. Process Perfect

An advisory practice’s review system should be clearly documented and understood by those work­ing within the practice.

The review documentation should record all of the key steps in the review process – including how and when each step is performed and who is responsible for ensuring it is completed. As much as possible, the review process should be systemised and leverage the functionality available in the latest planning software and client management systems.

Ideally this function should also be “owned” by one specific person within the business whose responsibility it is to ensure that the system is being followed at all times.

3. Regularity

Another key attribute of a successful review process is that it should be regularly reviewed. Continually seek your client’s feedback on how they view your review process and what suggestions they might have to improving it further.

4. Teamwork

The review meeting is an ideal opportunity to remind your clients that you are not a one person business (unless of course you are!). Involve your paraplanner, junior adviser, client service staff and other members of your team in these meetings wherever possible.

Reducing principal dependency will add value to your overall business (both in terms of longer term sale potential and bottom line profitability) and give greater confidence to your clients that there is more than one person interested in their personal and financial situation.

5. Cost and Profit

The practice must be able to put a value on their review process – what is the cost to deliver each client review? This cost should then be com­pared to the value the client is generating for the practice. Hopefully, the latter exceeds the former.

The review also provides the ideal opportunity to fact find. When you consider our ever chang­ing world, it is more than likely that many of your clients’ circumstances will have changed since you last met with them. Apart from ensuring you will be delivering to your clients’ expectations, it is quite possible that updating the fact find will lead to ad­ditional advice opportunities.

Rod Bertino is a partner and director of Business Health Pty Ltd., a consulting firm specialising in the financial services industry. Business Health provides a suite of exclusive business diagnostic tools, supported by a range of specialised consultancy services. 

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