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7 Steps to get ahead of #CRM2 in 2016 - Advisor Practice Management


7 Steps to get ahead of #CRM2 in 2016

Looking around the world, the 5 most highly regulated countries from a financial advisors perspectives are Australia, United Kingdom, South Africa, United States and Canada. What do financial advisors in these countries do to tackle major regulatory changes? Researching practice management from around the world and speaking to practice management colleagues in other countries, I found that while some of the concepts are similar, the implementation details and delivery to clients made the difference between average advisor and top performing advisor. The major regulatory change known as NI-31-103 or #CRM2 is not something that advisors can prepare for in a few hours. Depending on your business, there are several details to consider. Let’s look at a list of the top seven steps to tackle CRM2 from advisors who implemented successfully in other countries.


Seeing clients and having new discussions takes time

1. Build a 1 year timeframe – Project 100 (you need 50-100 hours to be properly prepared for CRM2 - it will take as much as a year as you may need to have new discussions with all of your clients. It is called project 100 because you will need to spend 2-4 hours per week over 50 weeks in one year to on building and implementing key processes ( if you do not already have them) The first step is to plan them in your calendar each week 2-4 hours working on your business. Think how long it takes to write a letter to your clients. Plan the time first. For example every Wednesday from 8-11 am working on the business implementing processes. Work on your business, instead of in it. Do you have a process to discuss total transparency, your fees and how they impact your clients? If you have never had a total fee conversation, (What do I get and what does it cost? ) then how do you know if your clients are not thinking about this when they see their statement? It's human nature.
2. Business models- your goals and lifestyle, or your business model . Does your business goals align with your lifestyle? Managing a large financial advisory business is great if it matches your lifestyle. Often coaching advisors, we have heard they want to manage 100-200 million. Then they want to slow down. It does not work that way. Find a mentor advisor that has the business and lifestyle you want to create. A question I ask in every workshop is “ how many ideal clients can you manage in a calendar year?” Is it 50 , 100 ,150 or more? The research says the ideal capacity is 100-150 ideal clients. The next step is to define your ideal clients.
3. Ideal Clients. An ideal client can be defined by the revenue produced or in other words, a profitable client. What is the ideal revenue in the first year and the ideal revenue on an ongoing basis? This is where I get different numbers depending on the advisors practices, which may focus on group benefits, wealth management or insurance. It does not matter what type of business you run, your ideal client has a revenue number. If your target is $6000 minimum recurring revenue per year and you have 100 ideal clients, then does that fit into your plans, and you can manage all of these ideal clients and build your ideal lifestyle? To learn more read the blog post “metrics of Trust” Remember, seeing your ideal clients and having new conversations about total transparency takes time. If you have 300 clients and they all will require time, where will 300-600 hours or more time come from in the next year?
4. Client segmentation – What is your ideal future client profile. Have it detailed, and do a case study or client story and put it on your website for the world to see. A quick way to segment your clients is to add up the number of hours you work each year ,say 1800 hours. Then find out what percent of time you service clients. Segment the clients into 2 groups, Ideal clients and non ideal clients. Ideal clients include complex planning. Non ideal clients include basic planning and simple transactions. Then find out how much time you spend servicing each segment and add it up. Do you want to work more than 1800 hours next year? Another question I ask in every workshop I do is” When Canadian investors see the fee for advice on their statement, will they expect more from their financial advisor? “ The answer is usually YES. The next question is the toughest “ how much more will they want or expect?” If you have 200 clients and they all want, need or expect another hour or two updating plans, setting goals or helping them understand fees, then where is the 200-400 hours going to come from? Capacity is going to hit Canadian financial advisors hard in 2017 if they are not prepared. How long do your discussions about fees in dollar terms, not just percentages take? Do you have a scripted process for discussing fees in dollar terms as well as percentages? ( you should, check with your compliance office and or branch manager )
5. Client Feedback – what clients value. Without client feedback, all else will be average. According to , only 15% of advisors in the United States have a formal feedback process for their clients. Those advisors that have a formal feedback system earn 52% more than advisors who do not have a feedback system ( Business Health Key Value Drivers US 2014) If you want to become a “client centric advisor” then build feedback into your client meetings and put it on the agenda.
Build your Upfront Branded Value Promise –VSP process – Value you bring, service you deliver and processes to implement with consistency. V for what clients value based on their feedback, a list of ALL your services and how you price your services. Then you need to articulate your value and all the services you deliver. I cannot tell you how many advisors cannot clearly articulate their value in a precise manner without winging it. Can you imagine going on the TV show " Dragon's Den" without being completely prepared around fees? The most important piece is the documented process that you use with clients to explain your VSP and having a detailed document to demonstrate your VSP.
Build your Ongoing service process . As a client what do I get for the fee I pay each year? Consider re-engage existing clients with an innovative and detailed progress update process and adding more value and services. Then build a document to show clients your detailed process for delivering your value on a consistent basis by telling them about your process. If you do not have a process, then build one or hire someone to help you build one.

6. Testing and implementing your NEW Value promise discussion . Test, test test. or practice practice practice. Before implementing any of your new strategy around #CRM2 ,practice it with your staff, then test it with your clients to find the key details in demonstrating your value, services and price. Without key data and feedback, it is difficult to build a client centric financial advisory business. Ask clients some tough questions and testing by re engaging existing clients with your new VSP Value , service , price process. My mentor Bill Bachrach taught me that you can not get a black belt by watching Bruce Lee movies. You need to go and practice, practice practice. That is why it is called practice management. Practice articulating your script or process over and over before meeting your ideal client.
Finally, when you are confident and ready, Implement changes and your new “VSP process for existing and new clients with confidence. Every top athlete knows how important confidence is in their game. Get the confidence in your clearly articulated process and watch your clients transform in front of you with confidence. Innovation motivates both the advisor and the client. Ask yourself “what did I innovate in 2015? Is it time to start innovating your business in 2016? By the end of the year, you and your clients can tackle CRM2 together and build a “client centric financial advisory business” built for them.
7. Define your future growth program. How much capacity do you have left in 2016? How many new ideal clients do you want in the next 12 months? 5-10 -20? How about the next 5 years? Going back to your ideal future client profile and how you are going to service your clients in the future, then determine the best way to grow your business. This is the number one concern for financial advisors from around the world. Capacity is a huge issue for financial advisors and their firms. Not only do advisors want to grow their business, under serving their ideal clients can be a major issue. Finding new ideal clients is also getting tougher. The old ways have changed and the new ways of growing your business include positioning ideal referrals, client feedback forums, strategic networking and working with centers of influence. Mastering the art of client attraction and client acquisition has changed. Everyone has a financial advisor or two today. How can you position yourself to attract and acquire new ideal clients. The top advisors have a proven process of attracting and discussing their value process to acquire new ideal clients, which I train financial advisors on.

Plan 2 hours in your calendar weekly, starting today.
If you would like to tackle CRM2 in 2016, start by investing 2 hours a week into your schedule to work on your value promise. Then list all of the areas you would like to prepare for CRM2. If you need a checklist go to my website to download a practice management checklist When will you have time to do it? Schedule it as time to invest in your business.