Don’t just assume

I learned a valuable lesson recently from one of our Brisbane-based clients.

They ran the corporate superannuation fund for a 100-employee distribution firm in Brisbane’s outer suburbs. Mid-way through last year, the distribution business was sold, for many millions of dollars.

Whilst my clients had proven their expertise managing the distribution firm’s corporate superan­nuation, they didn’t assume that they would be the distribution firm’s first choice to manage the proceeds from sale.

After the sale, the former owners of the distri­bution firm went through the traditional beauty parade to assess the large local and international fund managers to find a partner to manage their wealth.

Our client needed to build upon the relation­ships they had provided as corporate superannua­tion specialists, but they needed to define a new range of services to offer. And they knew how to do it.

Our client didn’t try to pitch how clever they were managing money. Instead, they aimed to im­press upon their former corporate super client that the key to future success was to make the smartest financial decisions among the many choices being put before them.

To help the business owners make those deci­sions, our client met with them to collaboratively design the roles and responsibilities now required to ensure that everything that was important to them about managing the proceeds from the sale of the business was carefully considered and planned for.

At the end of a two-hour meeting, they had drafted the role of what they called a “principal wealth adviser”.

This role was far broader than just managing assets. It took into account all the business owners’ financial issues, including personal and business interests, relationships, the roles played by accoun­tants and lawyers and other advisers, and, especially, the level of hands-on involvement that they actually wanted in managing their financial affairs.

With a new draft job description outlining the role of a principal wealth adviser designed specifi­cally for them, the business owners then went back to the institutions on the beauty parade, and asked them how they intended to perform the role as drafted.

They ended up taking up our clients as their principal wealth advisory firm.

There were several key reasons.

Firstly, our client did not assume they would get the job simply because of the former relation­ship they had managing the distribution firm’s corporate super. Our client wanted to understand the new directions the business owners sought, and recommend an appropriate level of financial leader­ship required to keep them on track.

Secondly, our client quoted for their services in a range of dollar amounts, not a range of percent­ages based upon the quantity of assets. Having run a successful distribution business, the business owners were very interested in the margins on the products, and they couldn’t see why the value of the advice should scale up and down so much simply based upon the quantity of product being placed.

Whether the amounts involved are large or small, the principles for all financial planning firms are the same: If we help our clients make smart decisions about their money, whilst determining if we are the best firms to help them achieve what is important to them about money, then our future is assured.

These are the best of times to be building advice firms.

Martin Mulcare is a consultant at Strategic Consulting and Training.