• Environmental analysis and market overview, including social, technological, economic and political (Step) and strengths, weaknesses, opportunities, and threats (Swot) analyses.
• The client proposition, including the value of independence and the first, second and review meetings as critical elements of the proposition.
• The system and process involved in service delivery
• People, and other business costs.
• Charging structures.
There are conventionally two further chapters in a classic business plan; Marketing strategies and planning an exit route. This month we will look at simple ways to enhance your offerings and how to attract new clients.
Clearly when considering the viability of a business there is always a tension between supply and demand, and while we have spent a great deal of time looking at what kind of services we might wish to supply to our clients, we should not ignore the demand side.
Old and new
This means thinking about existing clients, what services they want from us and how many will stay on board if we are restructuring the proposition or our charging structures. It also means thinking about new clients and how a firm will generate new demand for its services.
Put simply we can offer one service and find clients who will buy that service. A business working in this way will be extremely focused on finding ‘the right sort of client’. Many enquiries will be received and many will be rejected, with an absolute obsession on finding the individuals who meet the very detailed set of criteria that makes them the ‘perfect client’, ideally suited to the proposition that has been created. This may be framed in terms of occupation (for example, doctors), life stage (divorcees), likely planning requirements (retiring business owners) or assets (over certain levels available for investment).
Repurposing
Of course, having created one service, the business can then engage in ‘brand extension’. Müller Light now makes ‘Greek style’ yoghurt, Special K now provides many variants of cereal and snack bars, Dyson uses the same cyclone technology to create a variety of incarnations of floor cleaning equipment. Using extremely similar core systems and processes, these companies can provide different offerings, with different pricing structures, targeted at different markets extremely cost effectively.
The brand is still the same, and it is strong. The brand values are still the same, but the firm’s core expertise is applied to different propositions for different clients.
A similar approach can easily be applied to your business. A financial planning firm can also create a brand, identify its values and apply its core expertise to create a core proposition and then offer variations on that service to different sets of clients whose needs and interests differ from those of the core clients.
Many firms simply think of this in terms of a list, with increasingly costly services involving an increasingly lengthy list of service components. Think about your skills and expertise and consider a more creative approach.
If you are a pension transfer specialist you can sell this as a one-off ‘retirement income review service’. If you already have the in-house capability to review investment funds and comment on buy, hold or sell scenarios, package that into a ‘portfolio review service’.
You may not want to work with clients on an ad hoc basis, but many clients will want time to learn and trust you. Selling one-off services is a profitable way of marketing your skills and abilities to potential clients while providing a low-risk way for them to assess you and your service.
Over the longer term you may be looking for younger clients to work with, who can balance an ageing client bank (who can accumulate while other clients decumulate) consider offering an ‘employee benefit review’.
Family affairs
Offer services to younger investors as part of your service to their parents or grandparents. They are probably concerned about their children’s education and may consider paying for you to educate Junior on financial basics before they leave home and set off for university: budgeting, loans, basic banking facilities and issues, credit scoring, credit cards, managing debt, student loans, what to do if things go wrong.
Similarly, you can provide a ‘graduation service’ thinking about how to assess various job offers (high income, or lower income with final salary pension?), how the student loan will be repaid, repaying other debts, repairing credit ratings, early information on pensions, state pensions and other employee benefits.
If these sessions can be offered profitably this provides a stock of potential clients who are considerably more likely to return to you when they need substantial advice, or when they inherit the wealth you have helped older generations to accumulate.
Other cost effective methods of marketing include a client newsletter. Write it yourself instead of buying in standard content. Two sides of A4 equates to around four paragraphs of around 250 words. One section can be a constant statement about you and your business, leaving just three articles to write.
Write it in your own words (or rework something you read somewhere else). Share something of yourself and your investment and money management philosophies. Write about things that you know will be relevant to your clients, and answer questions you know they are asking (or should be).
Use the content to raise interest in new funds or strategies and to remind your clients of key dates or key activities. Use a question and answer format to educate and to tempt them to refer you to friends.
Offer seminars
Some advisers offer seminars to their clients. Content can include your own views on markets or financial planning strategies. Invite a fund manager or one of your favourite stockbroker portfolio managers to contribute, or bring in a technical expert to explain inheritance tax or pension planning options.
You could even ask clients to bring friends along and get them to buy tickets to attend, with the ticket proceeds going to charity.
Gill Cardy is managing director of IFA Centre
