Increasing the value of your Practice

The key decision that could dramatically streamline your advice process .. have a massive impact on your client reviews .. and substantially increase the profitability of your Practice

by James Andrew

30th June 2021

Ben Bryant

Ben Bryant of Forrest Wealth WA recently embarked on a unique 12-month program that has  significantly improved the efficiencies of his Financial Planning business. We discover how one simple decision has seen him streamline the advice process, had a positive impact on the efficiency of his client reviews and increased his practice valuation.

Ben has worked in financial services businesses for over 30 years. Principal and part owner of Forrest Wealth in Busselton WA, a firm acquired in 2011, he is well known in the financial planning industry of WA and his colleagues admire his conscientious approach to planning. His deeply held philosophy is to provide clients with possible options they may wish to consider, based on a clear understanding of their circumstances, current market conditions and with their best interests at heart.

At the start of 2019 however, Ben realised that there were certain aspects of his business that were troubling him. This was enough to motivate him to look long and hard at the quality of service he was providing to clients.

“I had taken a long break over Christmas and New Year,” says Ben. “The thing was, as I prepared to go back to work in early January, I realised that I would be spending the first few days simply getting organised and finding the client information that I needed for the client meetings I had scheduled in January. It was a wake-up call. A realisation that our client information was not necessarily all in one place and I had concerns that the investment portfolio information was somewhat out of date.

Ben realised that these shortcomings were not only going to impact the service he would be providing his clients as he entered the New Year, but that it had impacted the service he had provided over the previous few months.

Having recently passed his FASEA exams, Ben also wanted to ensure that his business was compliant under the new rules that were infiltrating the industry as a direct result of the 2018 Royal Commission into the Banking, Superannuation and Financial Services Industry. Ben realised it was time to re-group and address the processes, client data and the compliance standards of his business. “It wasn’t just the processes and client data that concerned me,” continues Ben. “I also had concerns about my knowledge of the metrics of the business that I was supposedly managing, in order for me to direct and grow the business. Looking back, I have only moved forward by acknowledging the business shortcomings and subsequently seeking professional guidance. Specialised guidance to be exact since, as most financial planners will tell you; our processes are at such mercy of professional standards, I knew I needed help from someone who was very familiar with ASIC compliance and regulations. The solution was not that straightforward.”

Ben recalled a conversation he had with a fellow financial planner, Mark Lewin, at a conference the previous year. Mark, a veteran of the financial markets dating back to 1983 and owner of his own  financial planning business, had recently set up a unique financial planning consultancy firm, Back Office Hero. Ben recalled that the Back Office Hero offering was exactly what his own business needed; namely a specialist consultancy that would work closely with his business to improve efficiencies, streamline advice processes and grow the business valuation. He called Mark on his return to the office.

“Back Office Hero Fills a unique gap in the Australian Financial Planning marketplace”

Stephen Prendeville – Forte Asset Solutions

The key decision – a 12-month commitment and leaving one’s comfort zone …

Mark Lewin had set up Back Office Hero along with two associates: Stephen O’Donnell, an experienced financial planning office manager, with an extensive marketing background and Chris Morris, a financial services business analyst with, most importantly, a deep understanding of the workings of Xplan.

“Ben Bryant and Forrest Wealth were one of our first clients,” explains Mark, “and whilst the business was profitable and Ben had built deep professional relationships with clients, the business lacked robust procedures and process efficiency. And like many practices, they had yet to develop the real power of Xplan.

Perhaps the most important issue, however, was the lack of business metrics to guide further strategic growth. As the practice principal, Ben was guilty of being too close to the daily activities of the business, without taking the time to build a reporting mechanism, common to well run businesses. In short, the business was reactive rather than proactive.”

A prolific networker and past compliance director of an AFSL, the issues were ones that Mark had identified in so many financial planning businesses over the years. With no real solution to these issues in Australia, apart from general business coaches, Mark formed “Back Office Hero Pty Ltd” in 2018 to assist practice owners build compliant procedures and checklists that could be leveraged with outsourcing and the proper adoption of Xplan.

In collaboration with Stephen O’Donnell and Chris Morris, he developed a 12-month mentoring and consultancy program for practice owners, specifically addressing processes, efficiencies and the management of client and business data. The program was specifically designed around the essential building blocks required to not only grow the business valuation but the provision of excellent client services. The outcome provides a compliant, profitable business that is “sale ready”. Ben had an important decision to make. The decision to engage Back Office Hero appeared an obvious one but it would mean a 12-month commitment which would take him and his staff out of their comfort zones. He ultimately chose to engage Back Office Hero as Mark and his colleagues knew the financial planning industry intimately, had a compelling value proposition and the outcome would allow Ben to build a valuable and transferable asset for the future.

The program has been specifically designed around the essential building blocks required to not only grow the business valuation but the provision of excellent client services. The outcome provides a compliant, profitable business that is “sale ready”

The power of Xplan …

Forrest Wealth’s program started, as it does with all Back Office Hero clients, with a Discovery Process; a full and extensive investigation of the current practice, where the Back Office Hero team reviews current procedures, client data and processes, in addition to interviewing all key staff members and stakeholders. A Practice Report is produced to, not only identify procedural issues, but to map out a tailored 12-month program for the business.

“The Discovery Process report was both concerning and exciting,” says Ben. “It was impressive in its thoroughness, but to me there were two stand out findings. Firstly, that our client information within Xplan was not as complete as I had wanted, mainly due to our misguided under use of Xplan, and secondly, the report clearly demonstrated a way forward that would essentially increase profitability, ensure our compliance and grow our business valuation. The outcome of course, would be a better client experience”.

“Xplan drives the business,” explains Mark, “research has shown that 65% of Financial Planning businesses are not using Xplan efficiently. It may well be more. What is even more worrying is that this in turn leads to a lack of true knowledge as to a business’s client portfolio”.

4 months on … empowered staff and growing the business.

After four months in the program, the change in the business to Ben is all too obvious. “The client files are now more robust and each of them is mapped in our Xplan database and every one of them is audit ready. I don’t overly concern myself about missing client data anymore, which has enabled me to focus on client acquisitions resulting from referrals from increasingly satisfied clients.”

Ben’s office manager, Janina, is also benefiting enormously from the Back Office Hero engagement. Ben has been obliged to renew Janina’s job description, which specifically allows her to update and improve business procedures. This has even seen the engagement of an offshoring partner to alleviate several menial and repetitive tasks. Essentially, staff empowerment[1] has led to quality improvements and provided Janina with a sense of achievement, critical to workplace enjoyment. Janina is now clear on her role within the business.

Ben himself meanwhile is also clearer about his own role, that periodically allows him time to divorce himself from the daily tasks of running the office, to work on his business, not in it.

Mark Lewin concludes with some interesting statistics. “Research[2] has shown that only 29% of principals have a 3-5 year strategic plan and 66% of practices do not have an operational business plan for the coming 12 months” he says. “More staggering is the fact that some 59% of practices are not aware of their best clients.

What gets measured, gets done

Whether you are managing a restaurant, a retail outlet or financial planning practice, it is important to know that you are focusing on those things that help your business achieve its mission. Anyone who manages internal processes, understands how challenging it can be to balance daily responsibilities with monitoring how well the business is performing.

It has been said that what gets measured, gets done. However, it can be difficult to evaluate how your practice is performing without the right tools. A quality improvement tool that some financial planning practices have started to use is the annual Information Memorandum (IM). The IM displays crucial data metrics over time that measures how well a practice is achieving its strategic plan and objectives.”

Mark Lewin and his colleagues at Back Office Hero believe that it is essential that planning practices generate reports to provide owners with up-to-date metrics for tracking performance and production. They see this data as being crucial to business plans, as it in turn guides management’s decision making. They also believe that this data should be used to fulfill the objective of measuring business value. Ben Bryant’s business is the perfect case study that demonstrates this, as the accurate client data he now has available in Xplan assists him with the generation of business reports. In short, as the quality of his client data has improved, so has his capacity to produce meaningful reports.

Ben’s first Information Memorandum will be completed at the end of his 12-month program. The document will accurately measure the key metrics of Ben’s practice and along with his new library of procedures, will ultimately support his business valuation. If and when Ben goes to market, buyers naturally will attack the asking price, but it will be the quality of the Information Memorandum that will be relied upon by Ben to support the enterprise value of his practice.  

Regardless of the timetable to sell, Ben’s IM will become an annual “sale ready” document.

The Royal Commission .. getting “exit ready” and optimising your business value

Back Office Hero is now in its third year and the core business remains that of working with financial planning businesses to enhance their business efficiencies and essentially their profitability. Recent months, however, have revealed a fascinating trend: an increasing number of financial planning practices looking to get “exit ready” in order to sell their businesses.

“In the wake of changes relating to the 2018 Royal Commission, we’ve discovered more and more financial planning businesses turning to us to help them with an exit strategy,” explains Lewin. “In my conversations with owners, they virtually all realise that they are not ‘exit ready’ operationally, whilst their client files are also way off the mark when it comes to supporting a sale price. We now offer a program to practice owners that improves the ‘transferability’ of their business, thereby improving the chances of multiple buyers and hence competitive tension.

Being “exit ready” is something Mark Lewin is passionate about. It is a passion that has arisen following the sale of his own financial planning practice. “I spent much of my professional life growing my business and looking after my clients,” he concludes. “Being absolutely exit ready and positioned for a smooth transition was something I not only owed myself after so many years, but something I owed my wife, family and indeed my clients.”

[1] Measurement of Staff Empowerment Within Health Service Organizations, Irvine, Diane, RN, PhD | Leatt, Peggy, PhD | Evans, Martin G., PhD | Baker, Ross G., PhD, Journal of Nursing Measurement Vol 7Issue 1, DOI: 10.1891/1061-3749.7.1.79

[2] Future Ready VIII, Insights into the Australian Advisory Profession, prepared by Business Health Pty Ltd, January 2020 Paper.

Your Practice Data is Gold!

Back Office Hero assists financial planners to use their business data to make better decisions.

Firstly, we ask “how many clients do you have?”.

Inevitably the planner does not actually know how many clients they have. The planner provides an estimate, but as we turn to the para planner or office manager we get different answers to the same question.

Not to be disappointed, we then ask to run a list of clients from Xplan, the so-called ‘source of truth’ for most financial planners. But once again the answer cannot be found as the Xplan data is inaccurate or incomplete. In other words, the data is dirty.

Here lays the undoing of many financial planners. They may be the greatest technician or salesperson, but they lack business acumen or the discipline to collect accurate data that can then be converted into valuable information. This is the foundation of making better business decisions.

Back Office Hero believes that planners should expend the same amount of energy collecting ‘ideal’ clients as they do on measuring business metrics.

BOH uses the following Guiding Principles when assisting financial planners.

  • Clarity of business health through data integrity
  • Building operational efficiency with processes and procedures
  • Securing the business owners quality of life

By starting with that first question ‘how many clients do you have’, allows us to demonstrate the importance of clean data, the power of Xplan and the use of business procedures.

Working with back office staff, we instil the importance of using simple procedures to capture accurate data. After our first meeting there is a rush of activity as the office manager re-classifies departed, legacy and deceased clients in Xplan and then applies ‘client grouping’ rules across all client entities.

This results in more accurate data, a position that must be reached before we can attempt to massage the data into valuable information.

To further test the accuracy of Xplan data we have a series of gap analyses to detect flaws and will often run a reconciliation against data collected from another source, such as an investment platform. The correct mapping of clients in the Commpay system is another example of data integrity to assist the decision maker.

It is about now that our clients are appreciating the old adage ‘clean data in, clean data out’.

One single procedure can sometimes be the answer. As the prospect client enters your office for the first interview meeting, what data is collected, what Xplan protocols are used and how do you classify the clients?

Only when we have accurate data can we start to measure the business metrics and extract value for the business. Now we can tackle the following issues with clarity –

  • What is the average FUM and revenue of the client base?
  • What are the attributes of our ideal client?
  • Who refers the most ideal clients?
  • What is our revenue growth?
  • How many prospects did we convert?
  • Who is due an annual review?

BOH provides  a ranking tool to not only show the most valuable clients, but to list those clients who should be moved on, allowing for an uplift in service to ideal clients. Data integrity allows the practice to apply the 80/20 rule that over time builds business valuation.

With new compliance rules dictating that financial planners must articulate the services provided to each client, with a justification of fees, practices can no longer survive with a long tail of unprofitable clients. With great care and respect, these clients need to be moved on to a planner who will ”love” them more in the eyes of ASIC and your Professional Standards department. For these clients, it is in their best interest to leave you.

BOH provides the procedure to develop your annual Information Memorandum document, that allows the practice to be ‘sale ready’. This document takes business data and converts it to a series of charts and graphs to demonstrate and support business valuation.

The metrics generated for the Information Memorandum will also greatly assist with the justification of targets within a Business or Marketing Plan.

So in summary, we have attempted to demonstrate how the act of building a simple client list has massive implications on the rest of the business. A practice that develops a culture around data integrity unlocks the real potential to provide clients with a service of the highest quality.

Such a practice easily manages the demands of our modern compliance regime and empowers staff to use and improve processes and procedures. By combining this with an effective outsourcing partner, you open the door to better profitability, a higher business valuation and a working environment enjoyed by you and your staff.

Mark Lewin

Back Office Hero

#backoffice #financialplanner

How to Save Time and Reduce Stress – create well written Procedures

Make it a habit to save time and reduce stress by creating well written procedures!

If one of your team can’t make it to the office one morning, and the staff payroll is due to be processed today…or something equally important, you will appreciate it if there is a well-written procedure available to explain what needs to be done and how to go about it!

When you and your team are able to access a well written procedure you will all know what to do, when and how to do it, and even more importantly not to make mistakes! This can reduce a lot of frustration and wasted time especially when it comes to having to undo mistakes!.

Well written procedures help your practice and your team function better.

By having well written procedures your stress levels will reduce because you’ll have less to worry about and you and your team won’t be spending lost time trying to work out how to do things they are unfamiliar with.

By writing an effective procedure for events that are repeatable;

  • your business will improve its efficiency
  • you will bring consistency to your practice activities
  • compliance will improve within your practice
  • there will be less stress on you and your staff!

Yes, procedures are a great idea and we should all want to have them available…but how to go about writing a procedure?

Writing a procedure can seem a little intimidating at first! However, like most things once you look more closely at them there is nothing to be concerned about.

Keep things simple!

In any practice, it’s typical for many things to get done without written procedures. There are “unwritten rules” and informal procedures. But sometimes these unwritten rules need to be set in a well written procedure.

Sometimes procedures can be too brief and restrictive, and at other times, they’re vague and lacking in detail.

Procedures step the reader through the “how to’s” for completing a task or process. They detail the steps to take, and the order in which these steps need to be taken. Well-written procedures are typically brief, precise, factual, and to the point. You need a well written procedure when a process is;

  • lengthy (example: a client audit)
  • complex (example: practice income administration)
  • routine, but it’s essential that everyone strictly follows rules (example: payroll)

and where the process;

  • demands consistency (example: implementing adviser instructions relating to a client or on-boarding a new client)
  • requires detailed and accurate documentation (example: recording a client’s investment recommendations and actions)
  • has serious consequences if done wrong (example: almost everything relating to a client’s interests!)

Easy steps to create your procedure

1. Gather information

  • Before you start, gather your information and think about who will use the procedure.
  • The reader needs to know how to implement the process correctly and the order, or steps, needed to do it.
  • They may need to know why something is done a certain way.
  • They will probably appreciate knowing what to do if something goes wrong.

Also think about;

  • Is there enough detail contained in the procedure for the reader to understand the subject?
  • Think about who will be reading the procedure. Is the level of detail appropriate for the reader?
  • How comfortable or familiar will the reader be with the subject?

 2. Break your procedure into steps

When you have gathered the information content for the procedure, identify the key steps in the process and number these steps. These steps will provide will form the headings for each section of your procedure.

There is no set rule of how your procedure should be formatted. It just needs to provide simple, clear, separate, easy to follow steps to arrive at the end outcome.

By breaking your procedure into steps it will be much easier for you to show the reader the process to follow from start to finish.

3. Write the procedure

Rule number 1 – Always assume that the reader has no prior knowledge of the subject. i.e. clearly explain the context, and the purpose of each step in the process.

Cut down the information to what the reader really needs to know about the process.

4. Bear these points in your mind!:

  • Write actions out in the order in which they happen. Start with the first step, and End with the last step.
  • Avoid too many words. Just be specific enough to communicate clearly.
  • Use lists and bullets.
  • Don’t be too brief, but also be careful not to overdo it! Keep it brief and to the point.
  • Be careful not to use jargon.
  • Write at an appropriate reading level for the person who will be reading the procedure.

Once you have written the first draft of your procedure and are happy with the content, then you can refine the words, layout and structure.

Remember, to end with a well written procedure;

  Keep it simple!       Keep it clear! 

If you need further assistance, please contact us.