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Building a Financial Advisor's Service Matrix

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Financial Advisors can push market their services by developing a Service Matrix for their clients.

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Building a Financial Advisor's Service Matrix

  1. 1. Building a Service Matrix Process for Growth Consulting In building a Service Matrix a FA needs to think of what is the Team/FA trying to accomplish with their clientele. Certainly there is the pure service aspect, checks, wires and reviews but there are several other goals that can be considered. There is tiering your clients to different service levels, a referral process and capturing life events. The questions we are going to explore is should the FA use the firm’s segmentation? Develop their own? And if to develop their own what should the FA’s criteria be? Next slide
  2. 2. Corporate Account Segmentation is based upon assets Assets Lifetime Silver Account Gold Account Platinum Account All Firms segment accounts based solely on assets. There is a built in assumption that as a client grows older there is a natural increase in assets. But by basing the segmentation on solely on assets several factors that are hard to capture are ignored. Possible future revenues and revenues that are generated that are not based upon assets, mortgages, lending and insurance are examples. The question that a FA has to ask themselves is segmentation by assets the most effective way to segment for them to segment their clients? Next slide
  3. 3. Corporate Client segmentation … … is only useful for a corporation to decide what services and/or products to give for fee or free. Relationship Managers should train themselves to recognize and bring to bear centers of expertise for life events because … 3 FAs need to realize that corporate segmentation is only for the corporation not for their clientele. FA methods on segmenting and tiering their clientele will be discussed in another exercise but for today we want to understand that capturing and understanding life events drive revenues. Next slide
  4. 4. I am getting married I am having a baby I am buying a house I need a business loan I am getting a rollover I am getting divorced I need to hedge a position I am retiring I am sick I have a concentrated equity position My father died My company is coming Public Do your support your grown child? If your spouse dies, who takes care of you? If you are self employed and get sick, are you covered? Are you worried about generational transfers I need life insurance Do you support a Charity? Do you have long-term care insurance? 4 The beginning of understanding your clientele starts with your Discovery Process. This is also discussed in another exercise but what the FAs need to understand here is that discovery is a continuous process as their clients lives are constantly changing. What is the weakness of financial plans? They are a snap shot in time. The FA can spend a lot time to developing a plan and then as soon as it is finished the client experiences a life event; loses his job, has a baby or contracts cancer. These events render the financial plan irrelevant. So the FA has to develop a continuous process that allows the FA to recognize new life events and be able to offer advice, service and/or a product (solution) for the client need. So what is a solution? It is the combination of advice, service and product for a client need. Next slide …life events drive revenues
  5. 5. 5 Develop a Client Data Template Corporations capture data to legally open an account Assists in the capture of client life events Update at all client reviews Assign Data Template to a Team Member Tier your Clientele: Based on what is important to the Team Center of Influence Referrals No hassle factor Client-centric Service Model - Ask the client how they want to be serviced Communicate Service Matrix to Clientele Client Data Templates The problem with firms new account information requirements is that the firm only asks for client information that it needs to legally open an account. Other than basic personal client information the account opening process includes several question to make a basic assumption of risk tolerances. So FAs must develop a Discovery Process which is series of questions design to uncover needs, goals and aspirations of the client. Client Data Templates are available for free on the internet and the FA should chose one that the FA feels comfortable with in helping in the gathering of life events. This template should be updated at least at every quarterly review. At a review not only should the FA update the client on the portfolio’s performance but the client should update the FA on new life events. On a team this should be assigned to one person and it should be a Critical Financial Objective (CFO). This is discussed in another exercise. The FA should develop their own criteria for segmenting and tiering. Small clients can be a center of influence and large clients can be a major hassle. In the book, The Supernova Broker, it says the broker should have so many touch points based upon the size of a client. This is wrong-headed as the FA should ask the client how they want to be contacted. If a $20 million dollar client says call me once a year and give me my performance is the FA suppose to say no, no I need to talk to you every other week whether you like it or not? Being client-centric means you do what the client wants. Finally communicate in writing the Service Matrix. Next slide
  6. 6. Revenues are consistent with life events not with assets Married Had a baby Bought a house Bought life insurance Revenues Lifetime Got a new job If the FA captures life events they will find that the life events drives revenues and a deeper relationship with their clients. By spending time and effort to understand Life Events FAs will be forced to deal with needs that don’t involve investments. An example is a client says that they are having a baby. I have asked hundreds of FAs what would they talk about to their client when told this information. All but two said a 529 Plan. This makes sense that a FA would say this. FAs think in terms of investments and the 529 Plan is an investment. But what do clients actually do? 86% of clients increase their life insurance while only 3% of clients open a 529 Plan. Worst yet what is the difference in compensation to the FA? Next slide
  7. 7. FAs Business Models are consistent with investment events Sell Stock Alternative Investments Over weight markets Revenues Lifetime Mutual Fund SwitchBond Swaps Todays FA business models is based in investments and revenues are driven by investment events. We know that around 98% of revenues of FAs come from investments and very little from wealth management solutions. Look up your revenue drivers. Next Slide
  8. 8. Which one is the most powerful business model? Married Had a baby Bought a house Bought life insurance Revenues Lifetime Mutual Fund Switch Bond Swaps Sell Stock Started a 529 Plan How much more powerful of a business model would the FA have if they captured both investment and life events? A up-to-date Client Data template will drive revenues and deepen relationships while increasing referrals. Next Slide
  9. 9. Client Service Matrix for your Clientele Operations Checks Wires New account IRA Contribution Junior Sales Assistant 555-111-2224 Junior Sales Assistant 555-111-2224 Senior Sales Assistant 555-111-2223 Junior Financial Advisor 555-111-2224 Investments Portfolio Review Municipal Bonds Alternatives Senior Financial Advisor 555-111-2221 Junior Financial Advisor 555-111-2222 Senior Financial Advisor 555-111-2221 9 Every client should be handed a Service Matrix to help them understand how they can be assisted in the fastest and most seamless method by the team. The Team has defined it’s functions, roles and responsibilities so the Service Matrix is an end product of defining the team members. Leaving the Client Data Template to another meeting lets look at a Client Service Matrix. By developing a Service Matrix for clients and then giving and discussing the Matrix with each new client allows for a seamless service experience as the client knows who is responsible for each service. Next Slide
  10. 10. Client Service Matrix for your Clientele Wealth Management Services Life Insurance Annuities Disability Insurance Mortgages Long Term Care Insurance Corporate Loans Estate Planning: Trusts, Gifting Retirement Planning Cash Flow Analysis Key Man Insurance Restricted Securities Junior Sales Assistant 555-111-2224 Junior Sales Assistant 555-111-2224 Senior Sales Assistant 555-111-2223 Senior Sales Assistant 555-111-2223 Investments Portfolio Review Municipal Bonds Alternatives Senior Financial Advisor 555-111-2221 Junior Financial Advisor 555-111-2222 Junior Financial Advisor 555-111-2222 Senior Financial Advisor 555-111-2221 Senior Financial Advisor 555-111-2221 Junior Financial Advisor 555-111-2222 Senior Financial Advisor 555-111-2221 Junior Financial Advisor 555-111-2222 Junior Financial Advisor 555-111-2222 Senior Financial Advisor 555-111-2221 Senior Financial Advisor 555-111-2221 Operations Checks Wires New account IRA Contribution Senior Financial Advisor 555-111-2221 Junior Financial Advisor 555-111-2222 Senior Financial Advisor 555-111-2221 10 Where updating the Client Data Template (Discovery Process) is pull marketing your Client Service Matrix is push marketing. Remember the Client Service Matrix should be handed to the new client and DISCUSSED. By letting your clientele know the solutions offered by the team it gives the Team an opportunity to present themselves as a wealth manager who solves financial problems. If a FA is going to present this Matrix to their clients then the FA/Team must be prepared to back it up. Discussed in the Wealth Management Process exercise.

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