Monthly Archives: November 2010

A year from now, don’t wish you had started today.

Anon

The real cause of the banking crisis

Written by . Posted on November 24, 2010. Filed under Books, Financial. No comments.

I have just finished reading “Whoops! Why everyone owes everyone and no one can pay”, by John Lanchester. Totally brilliant. A must read (and no I am not on commission or part of any affiliate arrangement). John is a journalist and author who in his book “Cityphilia” published at the beginning of 2008 predicted a worldwide crash based on the misuse of financial derivatives. In Whoops, John explains in terms that even I can understand what brought the banks crashing down, resulting in widespread bank bailouts in 7 of the G8 economies (Canada being the exception due interestingly to much tighter banking regulation).

He explains the technical complexities of Credit Default Swaps and Collateralised Debt Obligations in a way that even I can understand. The numbers are terrifying, the behaviour of the banks incredulous, the level of risk taken unbelievable and the ineptitude of the regulators staggering.

How, for example, was a situation allowed to develop that permitted the banks to collateralise “sub prime” mortgage debt (money lent to people who really can’t afford the repayments) and sell it to each other (offloading the risk to some poor unsuspecting but greedy financial institution (the cause of the demise of AIG) based on “AAA” ratings from the ratings agencies? In other words the banks (who paid the ratings agencies to rate the debt) somehow managed to persuade the ratings agencies to rate this sub prime debt at the same risk level as US treasury Bills! (Quelle surprise)

I found myself getting more and more angry at the greed, ineptitude, deceit, incompetence, arrogance and ambivalence of a relatively small number of people, that has resulted in the situation we now find ourselves in and for which there is a big price to pay for the next decade (and possibly generation). End of rant!

John makes a potentially “heavy” subject so entertaining and easy to follow whilst remaining totally authoritative. I found myself laughing out loud at the analogies used. Do yourself a favour. Buy this book. Being really angry and laughing out loud at the same time is a unique experience!

Here’s the link to the book on Amazon

Do not follow where the path may lead. Go instead where there is no path and leave a trail.

Ralph Waldo Emerson

Delivering client reviews consistently

Written by . Posted on November 18, 2010. Filed under Customers, Proposition, RDR, Webcasts Webinars and Videos. No comments.

Having a client review service that you can deliver consistently and profitably is key to sustaining and growing your recurring revenues. In this webcast I outline the key questions that advisers should ask themselves when designing or refining their client review service in order to ensure that they can deliver reviews on time, every time, for each client

FSA Platform Consultation Paper

Written by . Posted on November 17, 2010. Filed under RDR. No comments.

The FSA today launched their eagerly awaited consultation paper on RDR and the use of platforms CP 10/29. Download it here

Finding “ideal” clients

Written by . Posted on November 17, 2010. Filed under Customers, Marketing. No comments.

The single most common question I get asked by advisers is “how can I find more, better quality clients?” Marketing seems to be an area many advisers struggle with. Marketing doesn’t have to be difficult or expensive, but it does require time, energy, commitment, persistence and a little creativity. If you expect instant results, you’ll be disappointed.

Marketing Strategy 101

Marketing is the intentional process of creating and maintaining the relationship of “client”. It’s about:

  • Creating awareness (that you exist)
  • Generating interest (in you and the services you offer)
  • Creating demand (for those services)
  • Encouraging Action (to engage you)

In its simplest form a marketing strategy has 4 fundamental stages.

  1. Find your target prospects
  2. Set up cost effective and efficient ways of getting your message to your target prospects and persuade them to become “qualified” prospects. (A “qualified” prospect is a target prospect that has said or done something to let you know they are interested in your services e.g. downloaded a brochure, asked for more information).
  3. Make your “qualified prospects” attractive and relevant offers that make it easy to become clients (e.g. invite these people to a seminar “at your expense” or at a discount,or, at the seminar, offer them a discount on their financial plan if they sign up to a no obligation financial review).
  4. Don’t allow anything to get in the way of qualified prospects becoming clients.

Pretty straightforward, but the next question almost inevitably is, “Where will I find all these target prospects?” The answer? Going about their everyday lives. You will find your target prospects where they usually hang out, doing what they usually do.

Unsurprisingly that means they will be at home, at work, meeting at their clubs or professional organisations, involved in their community, reading their mail, reading their newspaper or favourite magazine or professional publication, talking on the phone, listening to someone speak at a seminar or conference, (or doing other things that are none of your business and would not lend themselves to an approach by you or anyone else, such as spending time with their kids!).

Reaching out

Now you know where to find them, you can start to think about how you might reach them with your carefully crafted marketing materials and messages (a topic for another time). So, what are some of your options?

  • A personal letter
  • A mailing
  • A phone call to their office or home
  • An article (or advert) in their local paper or professional journal
  • Join their clubs and associations (where practicable) and go to meetings
  • Attending relevant seminars and conferences aimed at your target market
  • Joining any networking groups relevant to your niche
  • Offering to give a talk at the above

Not all of the above will be appropriate for you and your business. Focus on those that play to your strengths. If you’re not confident on your feet, a talk might not be the best idea. If you really want to sex up your letter, consider engaging a copywriter who can write to maximise impact and response.

Now that we know where to find them and how to reach them all you need to figure out is what to say!

What actually provides competitive success and what is difficult to copy, is not so much knowing what to do – deciding the right strategy – but instead, having the ability to do it.

Jeffrey Pfeffer/Robert Sutton, “Hard Facts, Dangerous Half Truths and Total Nonsense”

Spotlight on RDR – Video Interview

Written by . Posted on November 12, 2010. Filed under RDR, Webcasts Webinars and Videos. No comments.

You might be interested in this short (5 min) video interview with Citywire which was released this afternoon in which I discuss with Iain Martin, whether advisers are focusing too much on exams and in doing so, whether they risk running out of time to get their business model in good shape for the adviser charging environment.

Click here to watch the video

Characteristics of a profitable client

Written by . Posted on November 10, 2010. Filed under Customers, Financial, Marketing, Proposition, RDR. No comments.

Endless column inches have been devoted to “segmentation” over the last couple of years as advisers have wrestled with the challenges of identifying their most profitable client segments or niche and the prospect of disengaging sensitively and compliantly with lower value clients.

One of the best examples of identifying a profitable niche that I am aware of, was related to me by Steve Moore, a fellow consultant, who works predominantly in the US. An adviser he worked with focuses exclusively on… wait for it… Mormon doctors in Salt Lake City. Pretty specific, don’t you agree? But guess who’s the “go to guy” for financial advice, amongst the Mormon doctor community in Salt Lake City?

Client segments can be as broad or as narrowly defined you wish. Males are a segment. But so are blond, left-handed females under age 30 who live in Guildford and drive Volvos. As this example suggests, segmentation can, to quote Tony Putman, the marketing guru and author, “be an endless exercise in accomplishing nothing much” unless you understand why you are doing it.

Why segment

Theodore Levitt the renowned author and professor at Harvard Business School once said, “If you’re not thinking segments, you’re not thinking”.

  • Some segments are better prospects for your services
  • Some segments have a greater need for your services
  • Some segments will take more effort to nurture, build and maintain relationships with
  • Some segments will be more profitable than others

Again to quote Tony, “”You want to dig your well where you have the best chance of finding water with the least amount of digging”

Key Characteristics

So, what are the key characteristics of an attractive and potentially profitable segment or niche?

  1. They have the means: they have enough money to both get value from your services and afford to pay your fees. Anything else and you both lose.
  2. Willing to pay a premium price for a premium service: some people will always buy on price but on the whole, you’ll enjoy better results if you focus on people who recognise quality and are willing to pay for it.
  3. Abundance: There are enough of them to capture a level of enquiries (in response to your marketing activity) that is sufficient to sustain your business (or new business requirements).
  4. Easy to communicate with: It will be easy for you to reach this segment to communicate your marketing messages.
  5. You already have (or can easily build) credibility with them: You have to get prospective clients to take what you have to say seriously. You are clearly at an advantage if that credibility is already established.
  6. They already know that they need what you offer: Whilst it is possible to get people to see a need they didn’t know they had, you are pushing against an open door if they already know they have a problem that your services can solve.

Use these characteristics to evaluate the potential of each niche that you are considering focusing your marketing efforts on. The niche doesn’t have to meet all these criteria, but if it isn’t meeting 4 or 5 of them, there’s probably a better option elsewhere.

In order to differentiate you must avoid the “curse of conformity”

Jim Collins, “Good to Great”.