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

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