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.