Maximising the value of an IFA relationship


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  • Key points Most solicitors will have some form of relationship with an independent financial adviser – even if it is simply a matter of giving clients the phone number of a local firm they know But with the Legal Services Act, solicitors are facing increased pressures to become more commercial and to take their client proposition beyond traditional transactional work As a result, the importance of a strong relationship with an experienced and highly-qualified IFA is likely to increase In this presentation we want to highlight how working with an IFA can potentially enhance a solicitor firm’s client offering We also show how solicitors can learn from established IFA working practices in order to build more focused and resilient businesses
  • Key points: IFAs have had to learn how to contend with major and unrelenting commercial, market and regulatory pressures and that is experience that many IFAs are keen to share with their solicitor peers. IFAs have had to learn how to become commercially minded to fend off competition from other advisory segments, including in-house tied advisers in banks and building societies, insurers and also growing competition from the direct execution-only financial planning market Likewise, IFAs have had to become adept at accommodating major regulatory changes and initiatives from MiFID to Treating Customers Fairly and the ongoing Retail Distribution Review And just as the Solicitors Regulation Authority’s is looking to overhaul its Code of Conduct, shifting from rules-based to principle-based regulation so this is something that IFAs have had to contend with for almost five years now. Indeed we understand that the chief architects of the revised SRA Code of Conduct come from a background in the Financial Services Authority so if you want to understand how to cope with ‘outcome-based’ regulation, a close relationship with a successfully compliant IFA is of huge value.
  • So what is an IFA? - Quite simply, an independent financial adviser is a financial intermediary who isn’t tied to any single or group of product providers. - An IFA must be able to recommend financial products from across the whole market Since 2004, an adviser can only call themselves independent if they give clients the option of paying them by fee In other words, an adviser cannot call themselves an IFA if they only allow clients to pay them through commission on the products they recommend - although many IFAs do continue to operate on a large commission basis
  • This slide shows how the definition of an IFA has evolved The concept of an IFA was first established with the Financial Services Act in 1986 – creating a clear polarization between advisers who were whole of market and those who were tied representatives of a particular company In 2005 advisers were redefined into three camps – independent, tied or multi-tied – primarily to accommodate the advice model of high-street banks and aiming to provide a practical compromise between full independence and tied sales However that compromise is now being swept away. The ongoing Retail Distribution Review means that, from 2012, someone providing investment advice to retail investors can only be called independent if they are able to advise across the whole product spectrum. Otherwise, they are called ‘restricted’. This sounds like we have come full circle back to 1986 – however the Retail Distribution Review is aiming to shake up the investment advisory professionals in a number of other ways too….
  • Key points: - You may have heard of the Retail Distribution Review and for anyone authorised to advise on investments, it is currently consuming a lot of attention Quite simply, the RDR is looking to banish investment misselling – first by making clear which advisers are independent and which are not; second by completely eradicating product commission; and third by imposing new professional standard on those looking to call themselves independent For IFAs who are fee-based and highly-qualified, the RDR may involve very little change – but it is anticipated that the proportion of advisers calling themselves independent may fall dramatically from 2012/2013 – at least initially.
  • This slide shows what will be required to call oneself an independent financial adviser from 2013 when the RDR proposals come into effect. Quite simply, IFAs will need to be more highly-qualified and have a wider, deeper product knowledge than ever before. Moreover they must have a fee-based charging structure that is agreed with the client and that is completely separate from product providers With greater professionalism and fee-based business models, IFAs are set to become much more closely aligned with solicitors and other professionals in the way they work. This in itself may encourage more solicitors and accountants to work with IFAs
  • - This slide outlines the current qualifications which meet or exceed the benchmark qualifications that IFAs will need to possess in an RDR world - A new benchmark qualification is being developed by the Financial Services Skills Council in conjunction with the FSA. Advisers holding the qualifications detailed above may still need to conduct further continuing professional development (CPD) *Please note this list is currently subject to review as new RDR professionalism standards are released. The FSA has also recently released a new consultation paper on Competence and ethics designed to cover all FSA-registered individuals which proposes to update qualification standards every three years.
  • So let’s now look at the benefits of IFAs and solicitors working together on behalf of clients. The nature of their respective areas of expertise mean that solicitors and IFAs tend to have quite different relationships with their client Solicitor contact with clients is often transaction-driven and erratic – it tends to be triggered by certain, often unscheduled events events such as death, divorce and house-purchase Financial planning, on the other hand, is ongoing: a skilled and trusted IFA can create a deep relationship that encourages continuous contact year after year in order to achieve the best outcome for the client By teaming up with an IFA, a solicitor can potentially tap into more of these ‘touch points’ and hopefully ensure they are at ‘front of mind’ for more events in a client’s life than conveyancing and will-writing
  • So where can solicitors and IFAs work together to add most value for the client? On the next few slides we illustrate key areas where the convergence between a solicitor’s activities and those of an IFA are particularly high Trust and estate-planning is an especially rich area for IFAs and solicitors to work together as it involves the management and legal ownership of assets Remember too that trustees are legally obliged now to ensure that money held in trust is invested appropriately However it’s also important for solicitors who are acting as trustees to remember that they cannot refer business to IFAs if they have an interest in that business
  • If you aspire to advise more high-net worth individuals then the capability to combine legal with financial planning is especially compelling Because high net worth clients are often conducting high-value transactions, there are many occasions where they may wish to have legal advice integrated into their financial planning Being able to conduct meetings where an investment expert and a legal expert are both present is especially appealing to these time-pressed individuals By bringing legal and financial-planning advice together, you can present a proposition that is more akin to the family office services provided by private banks
  • Elder care planning may not have the cachet of the high net worth market but it is a large and growing sector In addition, the financial regulator is imposing more restrictions on how advice on long-term care planning can be given so this is also emerging as a highly specialised market Solicitors and IFAs with the appropriate qualifications who join forces to focus on this area have a rich opportunity in front of them
  • Settlement planning is another interesting market. For many solicitors involvement may end with the award or claim settlement – however the ability to introduce clients to a financial-planning expert can potentially create a richer, longer-term relationship as you become integrated into the financial-planning aspect of the settlement Remember too that divorce work can be especially rich for referral business– if you provide a service that goes above and beyond what a client is expecting, they are highly likely to recommend you to friends and associates in the same situation
  • * All the advice segments we’ve looked at so far are focused on the private individual but don’t forget corporate work too There is a tendency to assume that workplace planning has been sewn up by the big employee benefits firms but this isn’t necessarily the case – especially among smaller local employers This is a powerful area for IFAs and solicitors can brainstorm to see which of their respective corporate clients could benefit from a jointly-coordinated approach Corporate work may involve a higher investment of time and unpaid resources upfront a companies may look to conduct a beauty parade and obviously in the current economic climate, employers are less inclined to spend money on nice-to-have employee benefits However this is an area where an advisory team can be called into a company after every budget and asked to debrief employees by email or newsletter on tax or pension changes With the introduction of pension auto-enrolment in 2012, no employer can now ignore their role in their employees’ personal financial planning
  • So far we have looked at the benefits of an IFA relationship in terms of how it can expand your client advice proposition – but that’s only one aspect of how a solicitor can benefit from a close working relationship with an IFA Solicitors may also be able to benefit from understanding common IFA working practices which can provide a depth of client and business knowledge that may be quite new to many solicitor firms One of these practices – the Client Fact Find – is a regulatory requirement. The other two are optional and are built on tracking client activity and behaviour But all of them base their success on sharing information across a firm – something which can be quite new for solicitor firms, where partners are used to ‘owning’ their clients individually.
  • IFAs must conduct a client fact find before giving any advice to a client The regulator takes the view that financial advice can only be given if the adviser has a reasonably deep knowledge of a client, their attitudes, their aims, their resources and level of knowledge of financial matters Ascertaining all this information can be time consuming but it can also be an extremely valuable means to get to understand a client and identify advice opportunities Please note that the client fact find is in addition to Know your client requirements for anti-money laundering purposes
  • Here are just a few of the questions an IFA will consider throughout the fact find process As you can see there are plenty of opportunities to see how a client’s current arrangements can be improved so they meet the client’s needs more effectively – or so that unnecessary risks can be eliminated Most importantly this isn’t an opportunity simply to ‘sell’ the client more products – it’s an opportunity for an IFA to show the genuine value of their advice by taking a holistic view of all of a client’s planning both now and into the future.
  • So here are just a few areas in which the fact find can be doctored to embrace areas of key interest to a solicitor This shows how a fact find can be future-facing – it is always looking to see what might change in a client’s life and how this can be planned for now By using a fact find you can help clients future-proof their arrangements – moreover you are likely to find areas where advice is required that go well beyond what the client originally contacted you about
  • IFAs are required to keep full records of client activities and transactions and many have also turned this process into a commercial benefit By maintaining a detailed picture of which clients are doing what, IFAs are able to maintain a detailed, practically ‘real-time’ picture of their business Some IFAs – especially larger firms – will maintain business MI data in great depth using online platform technology – smaller firms may simply maintain a spreadsheet – but the idea is that it eliminates big surprises, enables the adviser to pick up on trends and identify potential risks to their business Obviously, the nature of solicitors’ work doesn’t generally lend itself to this kind of client asset-flow analysis – nonetheless, every solicitor firm should be able to see how sharing client knowledge and tracking client activity through the firm can enable key client behaviours and opportunities to be identified
  • Client fact finds and detailed sales management information can then lead onto a third discipline – client segmentation Through deep client knowledge an IFA firm can build a detailed picture of the composition of their client base by factors including age, objective, portfolio size and social or professional profile This in turn can help firms anticipate client needs and resource their firm appropriately. For example, if 40% of your client based in aged around 55, then you know that over the next five to 10 years that you need to be prepared for transitioning a lot of clients into retirement. If 40% of your clients are aged 70 or over, then you need to urgently prepare to replace those you lose through natural attrition. Knowing what type of clients you have can enable you to target and deploy resources appropriately and ensure that your client proposition – and ‘brand’ - is in line with the people you are actually servicing. Quite simply, client segmentation enables you to see if the business you have is the same as the business you thought you had Client segmentation is also an opportunity to ensure that the level of service given to a particular type of client is appropriate to the price paid – this will become more important for the IFA sector from 2013 when they will be obliged to charge for their services via a transparent fee structure
  • Here’s a simplistic example of client segmentation in action Through client profiling it can be possible to classify clients in broad types as we have done here As you can see, the servicing requirements for these three client types are very different – segmentation has allowed us to see where and what resources need to be deployed to ensure that each of these different client types feels they are getting a service that’s absolutely right for them – and in a way that’s cost-effective for the firm itself And by providing each client with the right type of servicing, an IFA is more likely to retain that client and generate referrals from them
  • This slide shows the questions a solicitor firm might ask in order to start segmenting its client base It then shows the questions this can lead onto about the firm itself – this is an exercise a solicitor firm might want to conduct across its whole client base every quarter or least every six months Remember the secret to good client segmentation is cross-referencing – so you might know that 40% of your private client base are aged over 60 but how do they then break down in terms of frequent and infrequent contact and the nature of their business?
  • Here are some other areas in which IFAs and solicitors can join forces to work together You can contribute to each others’ client communications, hold joint financial-planning seminars in local venues, and offer workplace-based workshops to local employers By using both firms’ banks of knowledge, it is possible to more than double the insight you can deliver to each firm’s clients and prospective clients
  • IFA firm to detail what reports they provide to their clients
  • IFA firm to detail what reports they provide to their clients
  • IFA firm to detail what reports they provide to their clients
  • Many IFA and solicitor firms work together on an informal client referral basis. However firms looking to create a more formal arrangement specifically to offer financial-planning services can currently do so by setting up a joint venture between the two firms The Legal Services Act will allow fully-integrated multi-disciplinary firms from 2012 A joint venture can offer a lot of flexibility in terms of how the company is structured, owned and profits are shared A big benefit of the JV for a solicitor firm is that all compliance with FSA requirements can continue to be handled by the IFA firm while still enabling the solicitor firm to take a revenue from the JV’s activities as a ‘non-legal Joint ventures can be structured as a limited company or a limited liability partnership – however this has tax implications. For example, a reduced rate of corporation tax applies to small limited companies whose profits do not exceed a certain level but the profits of a joint venture structured as a limited company will be included in this sum – so some firms may prefer the JV to be structured as an LLP. However, other factors also needs to be taken into account and advice generally needs to be sought to determine the most appropriate structure for both the IFA and the solicitor firm Valuable information on structuring joint ventures between IFA and solicitor firms is available from SIFA, the body for promoting professional connections partnerships (
  • In conclusion here are some of the key benefits that solicitors can reap from a relationship with a highly qualified independent financial adviser With legislation like the Legal Services Act, we may be entering a new era of professional advice in which the dividing lines between legal and financial-planning disciplines are broken down and new business entities emerge to meet client needs By partnering with an IFA, solicitor firms can participate in this evolution and build a richer, more resilient business that meets the needs of more clients, more effectively
  • Maximising the value of an IFA relationship

    1. 1. Maximising the value of an IFA relationship
    2. 2. What doesn’t kill you makes you stronger IFAs understand the headwinds facing solicitors because we’ve already been there June 2006 Launch of the Retail Distribution Review November 2007 Implementation of the EU’s Market in Financial Instruments Directive (MiFID) December 2008 All retail financial services firms required to demonstrate Treating Customers Fairly principles January 2013 Investment firms must be fully compliant with RDR policy December 2005 FSA proposes principle-based regulation April 2009 EC announces plans to improve investor protection for packaged retail investment products (PRIPs) December 2013 Minimum capital adequacy requirement for personal investment firms raised to £20,000 FTSE All-Share Index
    3. 3. Solicitors may only refer clients to independent financial advisers <ul><li>Independent financial advisers (‘IFAs’) must research the whole market before making any recommendations – and must give clients the option of paying for their services by a fee </li></ul>
    4. 4. The evolution of financial advice <ul><li>1986 </li></ul><ul><li>Financial Services Act polarises of financial advice </li></ul><ul><li>2005 </li></ul><ul><li>Financial Services Authority allows depolarisation to increase high-street choice </li></ul><ul><li>2012/13 </li></ul><ul><li>Retail Distribution Review recategorises ‘retail investment advisers’ </li></ul>Independent Tied Independent* Tied Multi-Tied Independent Restricted *must offer a fee option to be called independent – otherwise called ‘whole of market’
    5. 5. Retail Distribution Review – your 10-second guide <ul><li>Launched by the Financial Services Authority in 2006 </li></ul><ul><li>Aims to improve and modernise how investments are distributed to retail consumers in the UK </li></ul><ul><li>Three main goals: </li></ul><ul><ul><li>Improve the clarity with which advisory firms describe their services to consumers </li></ul></ul><ul><ul><li>Address the potential for adviser remuneration to distort consumer outcomes </li></ul></ul><ul><ul><li>Increase the professional standards of investment advisers </li></ul></ul><ul><li>Firms must be compliant from end of 2012 </li></ul>
    6. 6. What will it require to be an IFA post-RDR? <ul><li>From January 2013, an ‘Independent Financial Adviser’ must: </li></ul><ul><ul><li>hold qualifications at a minimum level of QCF Level 4* </li></ul></ul><ul><ul><li>conduct a fair and comprehensive analysis of the relevant market when making product recommendations </li></ul></ul><ul><ul><li>have sufficient knowledge of all types of ‘retail investment product’ that could give a suitable outcome for a client </li></ul></ul><ul><ul><li>select products in line with the ‘client’s best interests’ rule (COB 2.1.1) </li></ul></ul><ul><ul><li>NOT accept commission from product providers (even where rebated) </li></ul></ul><ul><ul><li>operate a product-neutral pricing structure </li></ul></ul>*Qualifications and Credit Framework
    7. 7. What currently constitutes QCF Level 4? (NB This list is not exhaustive – for the full list see FSA Consultation Paper CP09/31) CFA Society of UK CFA Program Level 1,2 or 3 Chartered Insurance Institute Advanced Diploma in Financial Planning Advanced Financial Planning Certificate Associate/Fellow of Chartered Insurance Institute Chartered Financial Planner, Associate/Fellow/Member of the Life Insurance Association Diploma in Financial Planning Institute of Financial Planning Associate/Fellow Certified Financial Planner Chartered Institute for Securities & Investment (formerly Securities & Investments Institute) Certificate in Private Client Investment Advice and Management CISI Diploma Investment Advice Certificate LSA Full Membership Examinations Masters in Wealth Management Faculty of Actuaries/ Institute of Actuaries Associate/Fellow (post June-1994 syllabus) London Stock Exchange Full membership examinations Personal Finance Society Associate/Diploma/Fellow
    8. 8. Client asset value Client age 20 30 40 50 60 70 80 Buy first house Get married Have family Move house Change jobs Receive inheritance RETIRE Family cover School fees planning Mortgage/ repayment advice Conveyancing Annual ISA purchase Annual ISA purchase Annual ISA purchase Annual ISA purchase Annual ISA purchase Annual ISA purchase IHT & estate planning Review trusts Spousal tax-planning Write Wills Lump sum investment Pension maximisation/consolidation Pension de-risking Income drawdown Arrange SIPP Annuity purchase Regular savings pension Set up children’s investments & CTFs Review Wills Set up trusts Refinance Conveyancing Probate Review Wills Review trusts Long-term care Equity release Annual portfolio review Annual portfolio review Annual portfolio review Annual portfolio review Annual portfolio review Annual portfolio review Annual portfolio review
    9. 9. Where do solicitor/IFA synergies lie? <ul><li>Trust & estate planning </li></ul>IFA Solicitor Will writing Trust creation & administration* Probate Estate disputes Portfolio construction Balancing interests Inheritance tax planning Ethical investing (e.g. for charities) Remember: The Trustee Act 2000 obliges trustees to review any investments made with trust money on a regular basis and to obtain proper investment advice. * NB: Where acting as trustees, solicitors should not refer trust work to businesses in which they have an interest
    10. 10. Where do solicitor/IFA synergies lie? <ul><li>2. High-net worth clients </li></ul>Trusts & asset protection Estate management Pre-nuptial agreements Corporate asset structuring Wealth management Alternative investing School fees planning Tax-efficient planning Pension planning Insurance IFA Solicitor
    11. 11. Where do solicitor/IFA synergies lie? <ul><li>3. Elder care planning </li></ul>Power of Attorney Trusts Will-writing Equity release guidance Long-term care insurance Equity release product selection Impaired annuities Income solutions Remember: Only financial advisers that hold the CF8 Long-term Care Insurance qualification can advise on long-term care products IFA Solicitor
    12. 12. Where do solicitor/IFA synergies lie? <ul><li>4. Personal injury and divorce settlements </li></ul>Litigation Claims settlement Award assessment Trust creation & administration Lifetime income planning Tax planning Family financial planning Pension planning Insurance IFA Solicitor
    13. 13. Where do solicitor/IFA synergies lie? <ul><li>5. Corporate & employer services </li></ul>Employment law Corporate structure Client/supplier contracts Intellectual property Selling/insolvency Employer & group pensions Employee benefits & share schemes Workplace/director financial planning Insurance Remember: From 2012, employers will be required to enrol all eligible employees into a qualifying workplace-based pension scheme IFA Solicitor
    14. 14. Using knowledge of our clients to build and enhance our businesses <ul><li>Enables firms to both meet regulatory compliance requirements and build better businesses </li></ul><ul><li>Requires client information to be shared across the business and not kept to one adviser/partner </li></ul><ul><li>Technology essential to ensure data is up-to-date and easy to interrogate </li></ul>1. Client Fact Find Deep-dive knowledge of every client 2. Sales Management Information A real-time picture of a business 3. Client segmentation Build a business around genuine client needs Client Fact Find
    15. 15. 1. The Client Fact Find – a power-store of information <ul><li>IFAs are required to take reasonable steps to ensure that a recommendation is suitable for a client. Before making recommendations or managing investments, an advisory firm must obtain and document the necessary information regarding: </li></ul><ul><ul><li>Client’s financial situation – including - source and extent of regular income - regular financial commitments - assets, including liquid assets, investments and property </li></ul></ul><ul><ul><li>Client’s investment objectives – including: - length of time for investment - preferences for risk-taking - risk profile - purpose of the investment </li></ul></ul><ul><ul><li>Client’s relevant knowledge and experience – including - familiarity with relevant services, transactions and investments - nature, volume and frequency of transactions - level of education and profession </li></ul></ul>Taken from FSA Conduct of Business Sourcebook Section 9.2 Client Fact Find
    16. 16. <ul><li>The Client Fact Find - maximising the advice opportunit y </li></ul>
    17. 17. Client assets Are these all properly balanced with a cohesive strategy? Dependants and spouses Are all personal and investment allowances maximised across the whole family? Pension arrangements Are all these optimised in terms of performance, charging structure and ease of management? Risk profile Is the current portfolio aligned with the client’s stated risk profile and preferences? Time horizons Are investment strategies appropriate to the time left available for investment? (ongoing review) <ul><ul><li>Turning a regulatory requirement into a commercial and client advantage </li></ul></ul>Financial commitments Are assets and liabilities being offset as efficiently as possible? Client Fact Find
    18. 18. The Client Fact Find ( cont .) – using it to target solicitor issues Estates Are there any assets to be passed onto a dependant/ family member. How are these currently protected? Wills Have wills been written by the individual and their partner and are these up-to-date (e.g. post-divorce or birth) With client approval, IFAs can share fact finds with solicitors, thereby providing them with regular and comprehensive client information Elder care Does the individual have any obligation to any older relatives – how are their future needs managed? Transactions Does the individual face any imminent property, business or commercial transactions? Client Fact Find
    19. 19. <ul><li>Management information (MI) – a further tool to build a picture of a business and its clients </li></ul>
    20. 20. <ul><li>Level of client activity including most recent transactions </li></ul><ul><li>Client activity by adviser/office/whole business </li></ul><ul><li>Clients with unused ISA and pension allowances </li></ul><ul><li>Investment asset allocation by client/adviser/whole business </li></ul><ul><li>Assets held per provider provider/investment group/product </li></ul><ul><li>Gross and net asset inflows/outflows </li></ul><ul><li>Monthly/quarterly/annual revenues by client/adviser/office </li></ul><ul><li>Client bank by age/AUA*/professional profile </li></ul><ul><li>Transfer activity from/to other advisers/providers </li></ul><ul><li>Length of client retention </li></ul>*Assets under advice Assess individual adviser performance Leverage client data across the whole business Be alerted to sudden outflows of business Identify potential risks (e.g. high client exposure to high risk assets) IFAs use software and investment-platform tools to maintain a real-time picture of Track profitability by client/ adviser/office
    21. 21. <ul><li>Client segmentation – improve profitability, anticipate future business direction and give clients what they need </li></ul>
    22. 22. Use the client fact find and business MI to segment & cross-segment clients by: Age Asset level/profitability Transaction frequency/ objective/key concern Financial behaviour/ portfolio complexity Professional profile 1. Anticipate future needs across the whole client bank accurately and position business accordingly 2. Increase retention of high-quality/high-value clients and increase referral of new ones 3. Deploy resources efficiently to each area of financial planning and each client type 4. Identify and build key areas of expertise to build clear proposition, culture and brand 5. Ensure each client pays fairly for the service they require (i.e. no cross-subsidies) Which in turn allows us to: Anticipate client needs by life stage Identify current and future high net worth clients Differentiate advice services/ marketing/ communications by individual client needs This enables us to:
    23. 23. Segmentation in action For example, client profiling may tell us: 30% of our clients are professionals in their 30s-50s with fast-accumulating portfolios 10% of our clients are annual ISA buyers with few other assets with us 40% of our clients are over 60 with portfolios of £400,000+ <ul><li>Our key client segments are: </li></ul><ul><li>1. Young accumulators: </li></ul><ul><li>- Provide tax-efficient, growth focused strategies </li></ul><ul><li>Keep up to date with new investment opportunities and ideas </li></ul><ul><li>Focus on online servicing </li></ul><ul><li>Address life-stage financial planning </li></ul><ul><li>2. High-net-worth retirees </li></ul><ul><li>High touch relationship with focus on regular face-to-face contact </li></ul><ul><li>Focus on tax and estate-planning </li></ul><ul><li>Income and risk-averse strategies </li></ul><ul><li>Strong potential for client referral – including from family members </li></ul><ul><li>3. Transactional investors </li></ul><ul><li>Focus on efficient but low-cost servicing </li></ul><ul><li>Email with investment ideas and stock market commentary </li></ul><ul><li>Invite for portfolio review and assess consolidation potential </li></ul>
    24. 24. <ul><li>What can fact finds, MI and segmentation tell you about your business? </li></ul>
    25. 25. What is the age distribution of your clients – how is this changing over time? What is the ratio of personal to corporate clients (by numbers, by revenue share)? What are the growing and declining areas of activity? Which areas are seeing high levels of client referral? What is the distribution of your clients by frequency of contact (e.g. every quarter, every year, every five years?) Have you enough younger clients to sustain future growth? Are you overly reliant on a few large clients or well diversified? Where do you need to deploy resources? Which areas are proving your greatest strength and known area of competence? Does your servicing reflect the value of each client – how can you encourage more contact from less active clients ?
    26. 26. Other potential joint activities <ul><li>Client mailings & newsletters, emails </li></ul><ul><ul><li>Budget updates </li></ul></ul><ul><ul><li>End of tax year ISA and pension reminders </li></ul></ul><ul><ul><li>Stock market reviews & model portfolios </li></ul></ul><ul><ul><li>Best buy savings accounts </li></ul></ul><ul><ul><li>Personalised portfolio reports and valuations </li></ul></ul><ul><li>Client & prospect seminars </li></ul><ul><ul><li>Planning for a secure retirement </li></ul></ul><ul><ul><li>Managing a divorce </li></ul></ul><ul><ul><li>Funding old-age care </li></ul></ul><ul><ul><li>Passing on your estate </li></ul></ul><ul><ul><li>Asset protection (HNWIs) </li></ul></ul><ul><li>Workplace marketing </li></ul><ul><ul><li>Getting the most from your pension </li></ul></ul><ul><ul><li>Employee share schemes </li></ul></ul><ul><ul><li>Life-after-work planning </li></ul></ul><ul><ul><li>Wealth management for directors </li></ul></ul>
    27. 27. Client reports: Example– Investment Portfolio Management <ul><li> </li></ul>
    28. 28. Client reports: Example – Risk Analysis <ul><li> </li></ul>
    29. 29. Client reports: Example- Montecarlo Simulation (Probability Modelling) <ul><li> </li></ul>
    30. 30. Benefits of a joint-venture (JV) structure for financial planning <ul><li>If the JV is an Appointed Representative of the IFA firm, the IFA firm will carry front-line responsibility for compliance with FSA requirements </li></ul><ul><li>Solicitor participants can receive dividends provided the JV operates on a fee basis and accounts to clients for any commissions received </li></ul><ul><li>The JV can use the IFA firm’s existing staff, compliance and business management systems but must ring-fence the clients of the JV - and revenue from them - within the system </li></ul><ul><li>JV can be structured as a limited company or a limited liability partnership (tax considerations will normally dictate the appropriate structure) </li></ul><ul><li>Offers flexibility over equity structure and profit share </li></ul>
    31. 31. What’s in it for solicitors? <ul><li>Reinforce long-term high-value high quality client relationships </li></ul><ul><li>Attract more clients within your preferred market segment(s) </li></ul><ul><li>Improve levels of client referral </li></ul><ul><li>Increase levels of business from existing clients </li></ul><ul><li>Maximise efficiency and profitability </li></ul><ul><li>Build a holistic advice proposition </li></ul><ul><li>Transform threats to the legal sector into opportunities- The forthcoming changes are a welcome reminder of the need to change in a positive manner. </li></ul>