But at some stage it will be worthwhile taking the time to improve your practice management.  It’s about working on your practice as well as in your practice.

The benefits of doing so include higher revenues and profits and a higher business valuation.

There are a number of key goals you should strive for when designing your practice management methodology, which I call the Ten Commandments of Practice Management.

Drive down costs by Increasing efficiency;

1. Increase revenue without increasing costs, e.g. increase fees;
2. Improve systems and processes, e.g. simpler SOA process – 15 pages.
3. Grow the size of the client base, by attracting more of your preferred type of clients;
4. Increase the profitability of each client, e.g. pricing relevant to the service you provide;
5. Reduce the reliance on a key person (i.e. the planner);
6. Develop and implement marketing and business plans;
7. Improve conversion rates for the first interview;
8. Increase conversion rate at seminars.
9. Highest possible compliance rating.

In order to succeed at achieving the Ten Commandments of Practice Management you need to develop a plan that is measurable, achievable and reviewed regularly.  To do this you need to focus on each of the key areas of the management of your business, and while all these areas are interlinked they can be broken down into five key areas of management:

• Commercial
• Marketing
• Client
• Operational
• People

Commercial management is ensuring that you have systems and processes in place that include cash flow management, capital and debt management, business planning, management reporting, financial management including management of expenses etc. With effective commercial management of your business you will be able to manage and drive down costs. (commandments  1, 2).

Marketing management includes developing an efficient and cost effective marketing plan, pricing, service offering, referral management, managing relationships with centres of influence, client retention etc. Many financial planners have marketing strategies that are costly and ineffective, and can significantly curb the success of the business.  The goals of the marketing function of your business should be to increase the size of the client base, increase revenues, increase the profitability of your clients, implement  effective seminar programs and other business development initiatives. (commandments  1,3,5,6,8,9,10).

Client management is primarily how you service your clients on an on-going basis and the information you provide them. Developing an ongoing private client services program that is focused on keeping clients informed, making on-going adjustments to their financial plans and re affirming they are on track to achieving their goals and objectives and doing this efficiently is a must. (commandments 1,3,6,)

Operational management is focused on product selection processes, recommended lists, compliance, use of technology, and administration. Without effective and efficient operational management all the other areas of the management of your business are unlikely to succeed. (commandments 1,2,4,7,).

People are the key assets of a financial advice business as with all professional service based businesses.  People management should focus on HR management, communication, STAFF RETENTION, key person dependencies etc. Remember losing a key person in this business may mean losing a large part of your client base – this is one of the biggest risks in our industry.

Implementing Your Practice Management Methodology –

What You Should Expect from Your Dealer

The management team of your dealership should have the skills to assist you in your practice on all issues – if they do not you are aligned with the wrong dealer.   The following is a guide as to how your dealer group should be able to help you:

Dealership Head:

The head of your dealership should be able to spend time with you defining and refining your business strategy and be able to assist you with its implementation. This implementation includes working with you to win over and activate centres-of-influence who can refer pre-vetted and pre-sold prospects. Remember it is in the dealer head’s interest that your practice is successful.

Practice Manager or Dealer Business Relationship Manager:

You should be able to utilise the services of a practice manager or BDM-type person to run a diagnostic over your practice to identify issues and deficiencies and work with you to coordinate the required expertise from within the dealership. This person won’t have all the expertise you require but should be a good starting point.

Marketing Manager:

Your marketing manager should be able to work with you to develop a marketing strategy aimed at growing your business via a lead generation program that targets higher quality prospects who fit into your preferred client profile.  Your marketing manager should also help you build your own profile in your local area as a financial planning expert.  They should also provide you with the tools which assist you to generate leads, educate clients and win centres-of-influence.

Legal and Compliance Manager:

The legal and compliance manager exists not only to protect the dealer group, but also to deliver a service to you that ensures your practice is running compliantly and in an efficient manner. This is a crucial component of practice management as practices with a poor compliance record will have their sale value discounted.

Dealer Services Manager:

Your dealer services manager should be able to assist you in implementing systems with the aim of making your practice more efficient, including client review processes, efficient SOA writing processes, work flow systems, efficient portfolio reporting, and so on.

Technical Services Manager:

The technical services manager is a resource to help you improve your technical  skills.  They should also help you win clients by being available to review and/or design appropriate planning strategies.  In addition, they should help you work with centres-of-influence by developing technical strategies that may be used by the centre-of-influence to market to their client base.

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