Broker word cloud

The World of Financial Brokers today

Last month I agreed to put my head on the chopping block and give my general observations of Financial Brokers in Ireland today, my views formed by the work I’ve been fortunate to carry out with a great number of you over the last four years. So here goes…

A very resilient bunch of people

This is my overall sense of Financial Brokers and is the factor that has impressed me the most since 2011. At that stage many Financial Brokers were on their knees, as the market for personal financial advice and solutions had dried up almost completely. However most of you simply dug in, scaled back your businesses to a more sustainable size, re-examined your propositions and got out there meeting your existing and prospective clients. Thankfully in 2014 and again in 2015, many of you are now reaping the rewards of the effort put in during these tough years.

Financial Brokers do invest in their businesses

When I started out in 2011, if I had got a euro from every person who said to me that “brokers won’t pay for anything”, I’d be a richer man! The bottom line is that Financial Brokers are willing to invest in their businesses, where they see value in doing so. The days of only engaging with suppliers when a provider will foot the bill are long over.  Yes, you are very discerning about when and with whom you engage, making sure that you can see a clear return for your investment. But you’re 100% right! This ensures suppliers (like me) are focused on the value we can bring to you, rather than simply pushing products and services at you. Is this any different to the work you do with your clients?

Many Financial Brokers are not great at communicating the value you add

You know somewhere in the back of your mind the value of what you do and know that you are delivering value to your clients. The problem for many of you is that your clients are just not seeing it. From my experience of working with many Financial Brokers, this stems from not taking the time to actually articulate what you do and the value that that you add, and as a result not actually documenting your proposition. As a result, there are lots of “chats” happening with prospective clients, instead of structured conversations with relevant marketing supports that set out your proposition in a compelling and engaging way.

Some Financial Brokers are still trying to be “all things to all men”

Having a clear target market makes your life so easy. You can then focus your client value proposition, your sales activities, your marketing messages and indeed your whole support infrastructure around meeting the needs of specific groups. But some only see the risks involved in this – narrow groups of people to target, missing broader opportunities etc. As a result, many Financial Brokers continue to try to appeal to everyone. And as a result, they don’t really connect with anyone. Yes, your target market must be big enough to sustain you. But if you then focus your efforts on them, you gain the opportunity of creating a real standout positioning for yourself.

Pricing is a major challenge

As more and more Financial Brokers move from transaction based pricing to advice based pricing models, the big question that you are confronted with is how much to charge. This first of all comes back to your actual proposition(s), then how good you are at actually communicating these to your clients. Even then, there is a certain amount of trial and error. Certainly I know from working with many Financial Brokers in this area (and from my own work), you need to initially work out sensible pricing levels and then keep them under review going forwards. For those Financial Brokers with well thought out propositions, experience suggests that they tend to initially set their pricing levels too low and end up reviewing them upwards as they gain more confidence in their pricing. And yes, in many or most cases, the fees are collected through the commission system.

These are some of the main observations that I have of Financial Brokers today. In the main, you are an enjoyable group of people to work with, challenging too because of your ambition to see your businesses thrive. And that’s what keeps it interesting for me.


Set great Performance Goals for 2015

I wrote a few months ago about the important role that goal setting plays in getting your whole team pulling in the same direction. We’re now going to dig a bit deeper and set out a few thoughts on how to develop really effective goals to help to drive your business forwards.

Align the Goals

In my previous article on this topic, I set out the importance of alignment between the goals of each individual and the actual goals of the organisations. This might seem obvious, but sometimes I come across obscure goals that really have no relevance to the objectives of the organisation – this can happen when the process is rushed or not thought through properly.

Focus on Behaviours as well as the Numbers

Again (and for the last time!), as covered in the previous article, don’t just set quantitative goals. Behaviours drive activity, which drive results. So focus goals on behaviours, as well as on the numbers.

Create effective goals

Easier said than done? Well maybe… Goal setting does take time but it is time very well spent. Effective goals will help to drive effective behaviours, giving a better chance of better results. I don’t think that you can go far wrong if you check that each of the goals you set display SMART characteristics. SMART goals are ones that are;

  • Specific – The goal must be clear to the individual and not ambiguous at all – they must clearly understand what is expected of them.
  • Measurable – The goal must be capable of being measured fairly so that the individual can clearly see the progress they are making in achieving the goal.
  • Attainable – The goal must be realistic and fair. If it is completely unachievable, the individual is unlikely to be motivated to achieve the goal.
  • Relevant – The goal must make sense in terms of the “bigger picture”. The individual should be able to clearly understand the purpose and reason behind the goal.
  • Time-bound – There should be a specific time period (often the calendar year) in which the goal should be achieved. It can’t just be left open-ended.

Involve the individuals in setting their goals

In a previous organisation that I worked in, the employees themselves developed the first draft of the goals. This was a very effective method as it created an immediate level of buy-in to the goals. That’s not to say that the manager immediately accepted them though! There was inevitably a level of negotiation involved in finalising the goals, but the initial buy-in remained.

Set the goals in time

A gripe of mine again based on prior experience… Many organisations don’t take goal setting seriously or don’t give it the priority that it deserves. This results in delays in getting the goals finalised – I’ve seen calendar year goals getting finalised in May or June, when the year is half over!

Don’t set too many goals

It’s important of course to set goals that will help the individual to deliver the behaviours that you are seeking and of course the results that your business is striving for. But don’t get over-enthusiastic and start getting lots of goals to cover every base. If someone has too many goals or too many different measures feeding into their goals, the whole process can become too daunting for the employee as they feel they are juggling too many balls in the air. A good rule of thumb is to set no more than 5 goals.

Don’t try and be too clever!

I’ve also seen situations in the past where goals are set that try to cover every base – remember Specific in SMART goals. I’ve seen single goals that have been constructed as “…achieve €x in income from y group of clients while ensuring z% retention levels in business from that group and overall profitability of xx%!” Is that 2 or 3 goals rather than a single goal? The employee in this case will probably feel that they’ve very little chance of achieving the goal, as there are so many hurdles to be negotiated.

Don’t be afraid to change them!

This can be a tricky one but sometimes a review of goals is the only sensible option. However this needs to be a two way street… If goals are set at the beginning of the year and the company subsequently changes direction, the goals may no longer make sense. So don’t be afraid to review them. You’re better off with updated goals that make sense and a newly motivated employee, than a disgruntled employee who has no hope of achieving his/her goals as a result of factors that are not of their own making.

And finally, reviewing goals together regularly throughout the year is an important part of the process. It also can be very motivational for the employee, who will see you “pulling” for them, helping them to achieve their goals. Remember if the goals are well aligned, everyone will be a winner if the goals are achieved!

Are You a Go To Person? on a cork notice board

Are you the Right Adviser for your Target Clients?

“Don’t be silly, of course I am”, I hear you answer indignantly! If so, what makes you truly, uniquely the right adviser for your target clients?

Here are a few thoughts that will help your target clients to recognise you as the only adviser in town for them.

Know who your target market is

Do you really know who your target market is? Can you visualise them? The most successful sales and marketing focused businesses are ones that are crystal clear about who their target market is. I think that this is an area of real challenge for many financial brokers today. Most believe that their business will not survive if they narrow their focus to a specific group of potential clients. I vehemently disagree with this!

There are really successful financial advice businesses that have narrowed their focus with tremendous success. Some are only targeting people of a specific occupation, building a very credible presence at a national level with members of that occupation. Some focus on a narrow geographical area and focus all their sales and marketing activities around people in that area. Because they are not spread thinly across a wide area, potential clients recognise these advisers as focused on them, which helps the adviser develop a commanding presence in that target market.

Connect with their challenges

Once you know your target market, you need to immerse yourself in their world. Understand their needs, their challenges and the factors (both financial and non-financial) that are affecting their lives. Demonstrate at every turn your focus on them and remind them time and time again that they sit at the centre of your professional universe.

You see, if you can demonstrate that you understand them and their challenges better than other advisers, why would these clients go elsewhere? Yes they may choose to go elsewhere for a cheaper service, but are these the type of clients that you want? On the other hand, prospective clients who are looking for a premium service are much more likely to turn to a broker that understands their world and can meet their unique and specific needs.

Stay close to your target markets

Financial Brokers often baulk at the idea of marketing to specific audiences, as they fear that it turns everyone else away. Well yes it does to some extent – a point I’ll come back to later. But the benefit of this approach is that your target market are much more likely to connect with your messages if they are aimed squarely at them. So be brave! Develop content that is relevant to your target market, carry out research among this audience and share the findings, take every opportunity to demonstrate your expertise and knowledge of your target group.

Don’t lose focus on your target market

Particularly if you’re going through a bit of a quiet period, it can be very tempting to ditch your narrow focus and broaden your sales and marketing focus. While of course a point may emerge where your focus actually is too narrow and needs to be broadened, some advisers default to this broadening of their focus at the first speed bump that they meet. And in the end all that happens is that they begin the disconnection with their target market…

Rather than broadening your focus, look for ways to redouble your efforts within your target market and find new and better ways to build deeper connections with them.

It doesn’t mean that you have to exclude everyone else

I’m actually not saying that you only deal exclusively with your target clients. If you are looking after a particular group of people extremely well by being focused on them, they will see you as a very valuable adviser to them. And as a result are more likely to talk positively about you and refer other people to you. And these people will often come from outside of your target market.

So while your proactive sales and marketing effort is aimed at your target market, you hopefully will gain the opportunity of dealing reactively with lots of other clients from outside your target market, without damaging your market positioning.

At then end of the day, you have to trust yourself and the quality of your unique proposition. Identify a viable segment of the market and build your proposition around this. Don’t end up trying to be all things to all men, as you end up not really appealing to anyone.

There Must Be Some Way Out Of Here Concept

How are you going to exit your business?

This is a question that continuously exercises all business owners. How are they going to leverage their business to support their desired lifestyle when they want to stop working? This article explores some of the main areas you might consider to increase your chances of achieving your end goal in relation to your business.

What are your goals?

First of all, think about what is important to you in terms of exiting your business. Do you have a particular timeframe in mind? Are you looking to “get out early” and maybe have a long, but relatively modest retirement? Or are you looking to work hard well into your 60’s (or later) and then sell your business to fund a more prosperous retirement? If so, it’s important to be working towards a definite end date. Or are you looking to build a business that will continue after you’re gone, possibly headed up by one of your children, a business that may also support you in retirement?

These are really important decisions to think about now, as they will influence what’s important in achieving your goals. Will it be all about maximising the value of the business on a certain date in the future or are you trying to build extremely deep relationships between your clients and your business that will endure after you’ve exited?

Know what your business is

Now you’ve got to be really honest with yourself. What do you have to sell? Is it actually a business or simply a consultancy service? For some Financial Brokers, they’ve built up a thriving business in which they are the conductor of the orchestra, where the value is not based purely on their own presence in the business. These businesses are obviously very attractive to potential buyers. Then there are other businesses in which the value all revolves around the business owner. Take the owner out of the equation and what is there? While these businesses may offer a nice lifestyle to the owner, they are a far more challenging proposition when it comes to trying to sell.

If you own a business that is based on you as the key asset and you have ambitions to sell it one day, you need to start thinking about how you will develop some saleable value within your business.

Where is the value in your business?

So let’s assume that there is potential value in your business, outside of your own input and that your aim is to actually sell your business. Now it’s time to try and maximise the value of all of your assets. These might include;

  • Financial Assets: An obvious one to start. The main asset that a prospective purchaser will pay for is the future income stream of your business.
  • Persistency: The next thing a buyer will look for is the persistency of your business as this will be a key influencer of the potential future income stream. This will give them a sense of the quality of the “book” of clients that they are buying.
  • Brand: if your brand is well known and seen as a trustworthy brand, there is definite value in this for a buyer.
  • Staff: If you have a team of highly qualified, revenue generating people that will remain in the business, they are a very valuable asset to the business.
  • Market Positioning: If you have a recognised presence in some attractive market segments and niche areas, these may open up new opportunities to a potential buyer.
  • Operational Excellence: If your service proposition, compliance and data management (among other) areas are very strong, these offer great opportunities for a buyer to leverage off the capabilities of your business.

Who will facilitate your exit?

This is another factor that you need to start thinking about well in advance. Who is likely to enable your exit from the business? Once you’ve identified the profile of your potential buyer, you can then work on making your business proposition as attractive as possible to them.

If your aim is that your business will continue with a new leader / owner of the business, you need to start identifying who your potential successors will be. Do you have fellow directors who will buy you out? Or do you have younger, ambitious individuals within the business who might want to take over after you’ve gone? If so, you need to identify these people and start putting in place structures and interim incentives to retain them, and to make it attractive for both you and them for a buyout to happen in the future.

If an external buyer is your preferred route, you need to start identifying particular candidates. Would your business be attractive to current competitors, either in your market segments or geographical area? How would your clients react to this? Are there firms trying to build presence in a niche where you already enjoy a strong presence?

And then, how do you alert potential buyers? Is it a quiet word or a public tender (which will alert your existing clients)? Or can you use the broker networks to gather interest?

How will they pay

Of course one of your main areas of interest will be how much you will get for your business and how the consideration will be paid! Will it be a straight cash deal or will there be some tie-ins into the future in the form of earn outs etc. And how will your firm be valued – are buyers likely to look at recurring income, profits or future cash flows? And which of these works best for you?

Lots of questions to consider! Now is the time to start thinking about them. The more thinking and preparation you do well ahead of your exit date, the more fit for purpose your sale proposition will be. And all of that is likely to result in a higher price for you.

What are the critical areas that you believe need to be considered when selling a financial advisory firm?

Tug of war

Are your Advisers doing what YOU want them to do?

A challenge faced by many financial advice firms… The target market is clearly defined, the value proposition is carefully constructed and articulated and a suite of marketing supports are developed to help the team of advisers go out and attract a cohort of new clients. And then…nothing.

Well not quite nothing, but not the results that are being sought by the principals. Instead the advisers continue to work as they always did, going after business as they always did. Hitting their sales numbers (maybe) but not in the way that the firm wants it done – that is building up strong and durable relationships with clients in the chosen market segments, adding real long term value to the business.

This is quite a common occurrence, one I’ve come across in a number of firms, so why does it happen?

The goals are all wrong

This is where the problems usually start… Often the adviser goals are quite poorly constructed and actually are not aligned at all to the goals of the organisation. The principals might be clear about what they want to achieve and have Key Performance Indicators (KPIs) to help them track their progress. But unless they link the individual adviser goals to these KPIs, they really have little hope of them being delivered by the adviser. At the end of the day, the more aligned the goals of the adviser are with those of the organisation, the more likely those KPIs will be achieved.

The focus is only on the numbers

When you are trying to influence advisers to change the way they carry out their daily roles, you are actually trying to change their behaviours in their day-to-day activities of finding and targeting prospects, delivering advice and providing ongoing service to clients. But often, the behaviours receive scant attention as the year goes on; the focus tends to be always on the numbers. While the numbers are of course critical, it is the behaviours that actually impact them. It is so important to set expectations around behaviours, to monitor them and to measure them. If they are not being achieved, there needs to be interventions such as training, reinforcement of expectations, encouragement or sometimes good old fashioned pressure to deliver the required behaviours!

Rewards must be aligned with the KPIs

At the end of the day, money drives behaviours for a lot of people, and in my experience this particularly applies to salespeople! They work at the sharp end of the industry, in a role in which it’s pretty nigh impossible to hide, as results are clear for all to see. For this, they expect to be well rewarded.

But if their remuneration is based solely on their overall sales result, well that is where their focus will be. In this situation they will likely pay little attention to;

  • Those all-important behaviours
  • The quality of advice given
  • Product mix
  • Client retention

So what should goals and rewards look like?

The key is alignment between the KPIs of the organisation and the individual goals of your advisers. Obviously income generation will be a significant part of this, as this is going to be a goal of both the organisation and the individual. However, the level of “credit” that is given to advisers may be adjusted to take account of;

  • Are the new clients signed up by the adviser in the stated chosen market segments of the business?
  • The “shape” of the income – the level of upfront commission / ongoing income (i.e. trail) taken
  • An adjustment may be made to reflect the retention of business written by each adviser
  • Overall satisfaction levels of each adviser’s clients (this is surprisingly easy to measure).

One of the biggest challenges facing advice businesses is encouraging the individual advisers to work towards building up long-term value in the business. This is a big ask if their goals and rewards are based only on short terms factors. If you really want your advice team to play their part in building up value in your business, are you willing to reward them for doing so through long term incentive schemes or indeed through a route to a share of ownership in your business? Because at the end of the day, this is what it may take to really get them aligned with your objectives.

Do you use any particularly innovative methods to reward your advisers? If so, I’d be very grateful if you would leave a comment below.

CRM. Customer relationship marketing  concept.

Can you get more from your CRM system?

In the last year or two, there has been a significant upsurge in financial advice firms wanting to unlock the opportunities offered by CRM systems. For some, this has meant seeking to place it at the heart of their sales processes, for others their challenge has been to use it as more than a glorified address book. For others, they are now taking the jump from an excel spread sheet for the first time! It can be a very daunting task…

Here are a couple of thoughts to help you reap the benefits while minimising the frustration.

Understand what you want it to do

There are a number of industry specific CRM systems that many of the brokers in the Irish market are using today. These systems offer a very broad range of valuable features and offer functionality to help deliver many of the activities carried out by brokers every day.

But when you’re new to the system, the array of features can be quite bewildering and can leave you wondering where to start.

The place to start is not with what the system can do for you, it’s to identify how the system can help you address your own particular challenges. So you need to identify what these challenges are; do you need a system to help you in the segmentation of your client base, is to help you identify the right clients to contact at the right time, is it to track interactions with your clients or indeed is it to ensure you are delivering a more compliant business process?

Once you know what you want from the system, these are the areas to focus on with the system supplier rather than the 200 other features! Once you get comfort that the system can deliver what you need, then it just may be the one for you.

Capture hard and soft data

The record keeping aspect of the system is obviously very important, capturing all of the key information that you need to retain for your clients. Having this data in your system obviously makes it easier to retrieve information and indeed to use it again in the future. And your CRM system can provide a very useful audit trail in relation to your client interactions, which will assist you from a compliance point of view and may prove very useful down the road.

But it’s equally important to pick up and capture softer information about your clients that may not necessarily feature on your average factfind; the client’s financial goals and dreams (which should be central to your advice in any event), their aspirations for their family, their interests and indeed their likes and dislikes in relation to the method and frequency of communications. All of this information can make for a much richer relationship.


Talk to other users

Find out how others are using the same system. Ask your peers to even demo what they’re doing – from my experience, most advisers are only too happy to collaborate and help each other improve their business. Ask others at networking events about the features that they are using the most. Another route is through the excellent groups available to advisers on LinkedIn. There are a number of great groups (the PIBA, IBA & QFA groups come particularly to mind) in which you can pose a question with a good chance of getting some feedback from others.

Use all the time saving features

Ok, so now you’re up and running and using the system. Now is the time to start investigating how you can leverage the system beyond your initial aspirations. A good place to start is by investigating the many time saving features of the system. These will come in many forms. The capability of downloading data from providers will enable you to avoid a lot of the tedious initial data entry. Then look at the features that allow you to easily import data from for example factfinds completed online by your clients, which will save you or a member of your team having to type in the information.

Also consider how the system integrates with other systems that you use; capturing your client emails, quotation systems and any scanning and document management systems.

Get help in these areas. Getting help from an IT professional and/or the CRM system vendor will result in a lot less frustration and lower blood pressure!

Stay close to the vendor to leverage the full capabilities of the system

At the end of the day, nobody knows the system like the vendor so stay close to him or her! Give them feedback as they are always looking for ways to improve the system. Tell them what else you’d like the system to do, what you find difficult or “clunky” – after all, their main aim is to retain you as a user! Look for tips and help from them as to how you can better leverage the system. Show them how you’re currently using it and look for their advice as to how you might improve your usage of their system. Also, look for insights into where the system is being developed, as these developments could result in improvements to core parts of your business and advice processes.

Yes, starting to use a CRM system can be a very daunting experience. But it need not be. Focus on what you want from the system, seek help and then commit. The results in terms of saved time and effort, deeper insights into your clients and better business processes will make it all worthwhile.