This document discusses owning and transforming an advisory practice through business workshops focused on client segmentation, value propositions, charging models, and client communications. It emphasizes the importance of understanding different client segments, developing compelling value propositions for each segment, and pricing services profitably based on client value. The workshops also cover typical client journeys, costs of acquiring clients, and providing everyday advice to clients. Attendees are encouraged to focus on revenue-generating activities and processes, and to thoughtfully implement changes to own their practice for the future.
5. Own your Practice
Operational
Efficiency
Practice
Support /
Development
and
Legislation
Advice
Charging
Models
Customer
Segmentation
Customer
Value
Proposition
Practice
Financials
Personal
Marketing
Strategy
Management
InformationProduct
Strategy
6. Practice offering Transformation
6 x Business Transformation Workshops
1. Client Segmentation
2. CVP
3. Charging
4. Client Communication
5. Client Review
6. Transform
9. Segmentation in Action
First Class
12
Segment A
Business Class
60
Segment B
Economy
399
Segment C
60% of the profit comes from the 12 people at the front of the plane
13. The fundamental problem
Client doesn’t value Client values
Client gets
Waste of resources
(time, energy, effort,
money)
Bulls Eye
Client doesn’t get Happy days!
Goodbye and good
riddance!
Adapted from: Karl Albrecht, client Satisfaction Window, “The Only Thing That Matters”
14.
15. Most new ideas do not depend on new
information, but on putting together old
information in a new way!
17. Price is what you pay, value is what
you get and the value of anything
is the difference it makes… and the
sole judge of value is the person
paying for it!
18. Marketing Mix - Cars
Hyundai Mercedes
Product Basic, economical cars aimed
at those on a limited budget
Premium/ executive/ luxury
cars
Price Affordable, good value Expensive (but worth it)
Position Mass Market, reliable and low
cost
Quality, top end, image and
perception of success
Placement Functional Showroom
(ordinary people)
Palatial Showroom, chrome
and very smart
19. Marketing Mix – An advice business
My advice business
Product ??
Price ??
Position ??
Placement ??
24. Don’t panic…be deliberate
• Don’t move too far away from high touch model
• Practice solutions will follow the economics of the market
• Focus on activities and processes which are revenue
generating
• Decide if you want to grow or maintain until exit
Purpose of this session.
If you go out of business it is your own fault because them you probably did not deserve to stay in business
TO THRIVE YOU NEED TO PAY ATTENTION!! – Michael Gerber
Our approach is to assist you to transform your practice from a ‘perceived free advice practice’ to a ‘fee advice practice’ to the extent that it complies with RDR. Liberty will be offering Business transformation workshops.
The intention of these workshops is to assist Financial advisers with the necessary knowledge and tools to start the journey of transforming your business to one that will thrive in a post RDR world.
The toolkit breaks the “business transition journey” into 6 key stages or modules as follows:
1. Client Segmentation
2. Creating a compelling client proposition
3. Developing a profitable pricing strategy
4. Positioning your services effectively in the post RDR world
5. Developing a regular review service
6. Re-engaging existing clients about the new way of working
The first workshops will commence during the 3rd quarter of 2014 and will follow a phased approach with an initial intake of 250 Financial Advisers and will be conducted in the main business areas within RSA.
Lets take a look at an example of segmentation in action from outside our own sector. From the airline industry.
According to an article in Harvard Business Review, Singapore Airlines withstood the downturn in the aviation industry better than most of it’s competitors.
Singapore is a fantastic example of segmentation in action. This is the new modern Airbus A380 “double deck” airliner flown by Singapore
When full, has 471 passengers on board; 12 in First Class, 60 in Business Class and 399 in Economy.
60% of the profit from a typical flight from the 12 fortunate individuals at the front of the plane!
60 % of the profits from 2.5% of the passengers!
Now, I don’t know how much you know about the cost of airline tickets but a First Class ticket is likely to cost up to 20 times the price of an Economy ticket.
Do the First class passengers get 20 times the value?
Well as far as they’re concerned, quite possibly. Why are they prepared to pay such a premium (other than the fact that they don’t want to sit next to the likes of me down the back)? Well in a word… the experience.
Anybody flown first or business? Ask about the experience, what happens when you get to the airport?
Dedicated check in with no queue
Double the baggage allowance and more than one item of cabin baggage
Fast Tracked through Security
Off to the lounge for as much complimentary champagne and caviar as you can manage
Relax in nice comfortable chairs with complimentary newspapers and magazines on just about any topic under the sun. (We’re now on out 3rd or 4th trip around WH Smith or “World of Whisky”)
Not called to the gate until it really is time to board and get fast-tracked past the people who were told the plane was boarding 45 minutes ago.
Turn left once you get on board to be shown personally to your luxurious lie-flat seat and handed another glass of champagne to drink whilst you settle in. (Meanwhile we’re involved in something resembling a rugby scrum, as we elbow our fellow passengers aside to claim space in an overhead locker somewhere within 10 rows of where we’re sitting).
You get to eat (from a menu and proper plates no less), when you want, rather than when the crew decide it’s time to roll out the trolley.
Now, could be argued that all anyone gets is a seat, food and drink. It’s the packaging and positioning that’s different.
First class passengers
don’t get there any sooner (other than being let off the plane first), don’t get a more experienced or better qualified pilot and
still experience the same turbulence.
The Economy passengers are pleased to arrive safely,
at the right destination having been
fed and watered along the way.
That’s what they were led to expect. Expectations met. Happy days.
The First Class passengers will have had totally different expectations and provided those expectations are met, they too will be happy. They won’t care a hoot that they’ve paid 20 times more than the great unwashed.
In this session - look at how advisers might go about creating a compelling client proposition that your clients will value and be happy to pay for.
Many advisers find it hard to identify or articulate exactly what it is that they do for their clients. Even more aren’t sure what it is that their clients genuinely value about their relationship.
Advisers often deliver service elements that clients donʼt want or need. Fund factsheets at annual review meetings, for example would be a case in point.
odd detail conscious client - most wonʼt.
The impact of providing services that clients donʼt really need, want or value (or not providing services that they do!), is illustrated in the table below, which is adapted from Karl Albrechtʼs “Client Satisfaction Window”
Waste of resources (time, energy, effort, money)
Bulls Eye
Happy days!
Goodbye and good riddance!
Client proposition development tool is simply a series of questions designed to help you start to map out the core elements of your proposition with room to capture you high level thoughts. Again, this is contained in the accompanying guide.
Addressing the myth that client will not pay fees
Lack of confidence – biggest hurdle – worried they will loose clients moving to fee business
We’ll look at why many advisers really are suffering what I’ve termed a crisis of confidence about the RDR generally and Adviser charging specifically and why I see confidence as the key ingredient for success. I would genuinely love to be able to prescribe a pill or vaccination that instilled the level of confidence that their knowledge, qualifications, experience and value warranted.
I’ll also seek to dispel some of the popular myths about adviser charging and in particular fees
I also want to make sure that everyone can understand and see where the value is, during the client’s journey through the advisory process and how it is delivered through the client adviser relationship.
Look at pricing options in terms of the way you could levy your charges at each stage of the process and look at the pricing points at which uou could or maybe even should levy them.
Take a quick look at the thorny issue of VAT
Finally, I want to draw everything together, at a very high level, by exploring the concept of “a proposition worth paying for”, by looking at my own vision of what “financial independence and security” means for me personally, so there’s going to be lots of self disclosure during the session about what’s important to me financially and the reason for that is that I see myself as a typical client and hopefully that sort of client that those of you on the call might like to be working with.
In doing that I want to try to illustrate that for most people, it’s not their money that matters… it’s what their money allows them to do that’s really important.
NB qoute – value is the difference that it makes. Value
Though we don’t talk about people, what do they look like?
