Business operations the missing link in many advice practices says Encore


Efficient, scalable business operations are the missing link in many financial advice practices because the area is often deemed too hard to fix and not “sexy”, according to Graham Peatey, general manager of practice management consultancy The Encore Group, a subsidiary of van Eyk.

Mr Peatey said many advice practices believed they were ready to implement initiatives like “fee for service” but did not have the systems in place to make them work consistently and sustainably across their businesses.

“’Business operations’ is not a topic that gets many people excited. It doesn’t have the same wide appeal as, say, marketing or business strategy,” Mr Peatey said. “I think this is why business operations are so poorly done across our industry. It can be tedious to invest time in the detail of mapping processes and ensuring they serve a business well.”

He acknowledged that mapping these processes was a considerable investment in time and other resources, “However, putting in the time to ‘hard code’ a business’s operations will pay off in terms of greater control and better cost management, whether it is a one-man practice or a dozen advisers” Mr Peatey said.

He said the four key questions business needed to ask about their processes were:

  • Are they efficient?
  • Are they scalable?
  • Are they accessible to all staff?
  • Do they consistently deliver on the client value proposition?

Unfortunately, it was still the norm for operational management to be largely absent or based on limited approaches like a simplistic paper-based manual.

Mr Peatey said client management and workflow systems in software such as XPlan, Adviser Logic or Coin could be powerful tools for automating these processes, from how to handle a new client to managing an insurance claim, but they were usually poorly used.  “They give you the ability to automate the mundane activity so that advisers can focus on the areas that really need their expertise,” he said.

Mr Peatey said once FoFA became mandatory on July 1 2013 the value financial planners were providing clients would assume much greater importance and if an adviser were charging clients a regular fee for advice they needed to be able to demonstrate how much work they were doing for that client. “Mapping and recording business processes in a repeatable and efficient manner will make this task much easier,” Mr Peatey said. “A great relationship with a client will only go so far; eventually clients will want to see value for money and delivery on the CVP and service promise.”

Improving business operations can also help a practice allocate resources much more efficiently. A typical problem for many advisers is spending too much time and resources on low-value clients and not enough on high-value clients, he said.

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