Top tips that Financial Planners can learn from Accountants about running their firms

Top tips that Financial Plannerscan learn from Accountants about running their firmsIan PickfordPartner Mazars LLPDirector Mazars Financial Planning Ltd

Mazars Employee Benefits Ltd

In some ways, accountants run similar businesses to financial planners, especially in the new adviser charging world.

Accepting the important differences in their professions, this session considers what we can learn from accountants’ business practices.

Content

• Structures, teams and people

• Succession planning

• The ‘Business Model’ and how to charge

• Professional ethos and training

• Client retention

• What do accountants do right and what to avoid

Structures, teams and peopleDo you have the right people doing the right job?

Structures, teams and people

Your structure should define your team . . .not your team define the structure

The best goalkeepers don’t usually make the best centre forwards

Structures, teams and people

• The inverted pyramid

Highest Staff Cost

Numberof staff

Structures, teams and people

• The ‘professional services ‘pyramid’

Highest Staff Cost

Numberof staff

Structures, teams and peopleHigh cost people should be undertakinghigh value functions• Do you have high cost staff undertaking functions that lower cost staff

could deliver?

• Push as many low cost functions down the team

• Do your high cost staff deliver value to the business?

• Low cost staff should be highly utilised

• Where do your high cost staff spend their time and what are the results?

• What KPI’s run your business and how are they communicated to staff?

• What does your business structure do that stops individuals maximisingtheir output?

• Productise high frequency and low value processes

Succession Planning

What are you and your business about?

• Custodian

• Are you looking to cash in your ‘chips’

• Choice may lead to a different course of action

• Although there will be a lot of similarities:

• Build a brand

• Succession structure

• Have something to sell!!!

Succession Planning

What are you and your business about?

• Have a business that is dynamic

• Streamline your business

• Remove waste and in-efficiencies

• Maintain and demonstrate good cash flow

• Show improving profit and growth

• Be place people want to join

• Training plan and graduate/new starter scheme

Business model and how to charge

What are your KPI’s?

New works winsManage uninvested cashDebt controlBilling

Identify the KPI’s that make your business work and manage them religiously

Business model and how to charge

You need to know what it costs to deliver your client work

HOW MUCH DOES IT COST YOU TO GIVE ADVICE?

Do you know?

Business model and how to charge

FeesHave a model that suits your proposition

•Time cost•Fixed•% FUM•Contingency•Success•Or a combination

Business model and how to charge

VATRule of thumb

Advice only VAT-ableImplementation of financial productsnon VAT-able

Get professional advice on your client service agreements and fees

Business model and how to charge

Do not start work without a service/fee agreement in place, which states explicitly:

•What you will do

•What the client is responsible for

•What the fee is and the basis of calculation

Don’t do anything outside this without amending the fee

Business model and how to charge

Debtors

Businesses close down not because of a lackof business but a lack of cash flow

Collect your debts

You are not a charity……. a non payeris not a good client

Business model and how to charge

Manage your debtors

•Have an agreed debtor policy

•Don’t be afraid to go legal

•Use tools to collect feese.g. DDM’s, platforms etc.

Professional Ethos and Training

Are you a ‘Professional Adviser’ or ‘Knowledgeable Salesman’?

Selling is at the ‘heart’ of what you do, but don’t give away your Intellectual Property

Do the right thing………….if you do why shouldn’t the client pay!!!

Professional Ethos and Training

Training

Past focus has been on Qualifications

New world these are a given!!!!!!!

Professional Ethos and Training

Maintenance and growth training plan for your team which fits your business objectives

Important to train ‘soft skills’•Fee negotiation•Marketing•Proposition consultancy•Meeting skills•Technology

Client Retention

1.Value ‘2 way’ relationships

2.Free clients are not ‘2 way’

3.People tend to value what they pay for

4.Have service agreements and deliver to them

Client Retention

Professional Clearance

Should IFA’s operate this approach?

What do Accountants do right and what to avoid

Right

1.Hierarchy

2.Manage utilisation and cash flow

3.Emphasis on doing the right thing

4.Recognise ‘graduate training’

What do Accountants do right and what to avoid

Avoid

1.Can have a narrow view of the world

2.Advice ‘comfort zones’

3.Can have ‘silo’ mentality

4.Underestimate the value of soft skills training

Questions