ADVISER MATTERS
PRICE AND VALUE SEEMS TO BE THE AREA THAT MAY REQUIRE ATTENTION , WHICH PROBABLY LEADS TO DESIGNING A FULLY FORMED METHODOLOGY , MAYBE MORE THAN “ WE ’ VE ALWAYS DONE IT THAT WAY ” OR “ THAT ’ S WHAT WE DID AT MY PREVIOUS FIRM ”.
Personnel Hourly rate Minimum Adviser 150.00 £ 1,813 Paraplanner 75.00 Administration 50.00
Action
Adviser time
P / Planner time
Admin time
Adviser Cost
P / Planner Cost
Admin Cost
Pre meeting information gathering 1.00 1.00 3.50 £ 150 £ 75 £ 175
Telephone call to qualify and position meeting Pre research if applicable Build meeting pack
First Meeting 2.50 0.00 0.00 £ 375 £ 0 £ 0
Background and Rapport Disclosure / Discuss advice process ( inc ongoing ) Factfind ( inc vulnerability issues ) / ATR assessment Discuss existing arrangements / Obtain LoAs Discuss goals and objectives Discuss advice timescales and next actions
Administration , research and analysis 3.00 1.00 1.00 £ 450 £ 75 £ 50
Smart search / MLR Admin on LoAs Revisit information and ATR output Reassess / question factfind if required Analyse existing policies Decision making based on client goals Provider , product and fund research Build client file ( electronic ) and admin / storing info Product report and suitability for second meeting Arrange second meeting
Second meeting and recommendation 1.00 1.00 3.00 £ 150 £ 76 £ 150
Recap and check for change in circumstances Present research and suitability Answer questions and queries Sign up if applicable May lead to a third call depending on client
Administration 0.00 0.50 1.00 £ 0 £ 38 £ 50
Recheck applications and update records Applications and chasing / follow ups Contact clilent with progress and when completed Issues documents if applicable
TOTAL 7.50 3.50 8.50 £ 1,125 £ 264 £ 425
Minimum charge £ 1,813 % charge Threshold 0.75 £ 241,667
Charges MI is useful to monitor and if you monitor , you can manage . It ’ s from this position of power you can start making a difference to your charges and follow a simple but effective upgrade programme : Identify inefficiencies > change processes > reduce time and cost of manufacture What this leads to is more time to do any or all of the following :
• reduce minimum charges
• take on more clients
• reduce your advice gap
• slow down
• semi-retire
• play more golf
It also means if the Regulator asked you to demonstrate how your service meets the Price and Value Outcome under Consumer Duty ( which they can ) you can do that .
CIP A CIP is a beautiful thing if time and effort is spent on its creation , and then followed through using software to manage an investment , platform and product selection process . If it ’ s something you gather together from other stuff on the internet , or you go half-cock , my advice is don ’ t spend the time as it ’ s not worth it . A CIP should be the methodology you engage in order to do the fundamentals , namely make sure you look at all the investment solutions out there , and after fully understanding your client ’ s goals , create the best solution . There ’ s three main ones :
• categorising your clients
• client and fund risk management
• selecting the appropriate investment solution , product and / or platform .
Sounds familiar ? It should do , because in essence this is Product Governance ( PROD ). Here ’ s that Consumer Duty again , one of the four outcomes is Governance of Products and Services with a bit of a word swap thing going on . The point is , PROD is dull . If you just look at it as a thing you have to do , put it on file and get back to work . PROD in fact should drive a CIP , then it becomes really useful and flexible , as well as future-proofing , driving efficiencies into your advice process . And how does that work ? It ’ s that simple but effective upgrade programme . Identify inefficiencies > change processes > reduce time and cost of manufacture What this leads to is more time to do any or all of the following :
• reduce minimum charges
• take on more clients
• reduce your advice gap
• slow down
• semi-retire
• play more golf
It ’ s the interconnectedness of all this which is fascinating ; processes affect charges which affect CIPs which affect processes and so on . An upward spiral of efficiencies and reduced cost , a Fibonacci Sequence for advisers .
Visit the Business Consultancy section of the Member and Client websites , under Compliance , for further tips , guidance and support .
# 05 | SUMMER 2022 | 11