Background to Hatch
As I’m heading towards 50, I find myself sounding more and more like that guy who bangs on about how much better things were in the old days. Something I hear often from financial advice business owners, who are around that age or older, especially those who learnt their trade at one of the big insurance firms, is how brutal but effective sales management was back in the day.
Bloated fees from expensive old products allowed big companies to employ heavily incentivised sales managers to peck the heads of their sales agents for activity - and results - at least twice daily. Typically, 8.45am: “What are you doing today?” 4.45pm: “What have you done today?” It was grim, but it worked. Maybe not for the customers, but certainly for the sales figures.
Over the past 20 years this hard-nosed sales culture has fizzled out of the advice industry. There are multiple reasons for this. The insurance companies shut down their big sales arms and new advisers have not been trained up through the lifeco sales machine. Most advice businesses don’t work with the scale and margins to pay for dedicated sales management. The culture of advice has changed and softened, for the good, with a greater emphasis on professionalism and client care, and less on sales at all costs.
To be honest, whilst it might have worked, it was also miserable and many of the advisers who left to set up their own advice business did so just to escape it.
Now financial advice and planning has never been more professional. But many of us still wonder if a little bit of that old school energy and nous could be added into modern day business planning, in a way that doesn’t compromise its ethics and good practice but brings more clients and revenue to it with quiet efficiency.
We're proud to introduce Hatch, designed to do just that.
We’ve created a solution called Hatch which is designed to solve that problem.
Its primary purpose is to provide business owners with all the insight and information they need about their marketing and sales performance, to allow them to invest sensibly, understand where they need to make changes, and avoid waste by making great decisions.
Why another piece of technology? The back office systems currently used by advisers are great for some of the specialist work required by adviser firms, such as fee reconciliation, connectivity to platforms and providers, and storing policy details. But it’s better and cheaper to use a purpose built marketing, communications and sales management system for those tasks, albeit ideally one which integrates into your back office systems. These Customer Relationship Management (CRM) systems are less specialised to financial services and work internationally. So users benefit not only from their scale, with millions of users helping to improve the solution, but also from global competition which drives down costs.
ClientsFirst has a sister business called Karman Digital which is a digital marketing agency operating outside of the financial services sector. Karman Digital has a particular specialism around HubSpot; the world’s fastest growing CRM. We’ve delivered sales and marketing capability through HubSpot to some of the UK’s major online retail businesses.
Hatch is a solution we’ve developed using all that expertise, specifically for the financial advice market. It uses HubSpot’s technology configured to suit the needs of a modern financial planning practice owner.
Hatch will:
- Measure return on marketing spend to the penny
- Record and improve sales performance
- Make your client communication better than ever
- Reduce time spent on data administration
- Tell you where you can improve
- Provide real time MI to put you in control of your business
- Always be easy to use, keeps improving, and doesn’t date
Growth Dashboards – What’s Your Key Growth Metric?
Many firms will keep an eye on one or more metrics to measure success.
Profit is the most obvious metric to use when measuring the financial rewards of running a business, and has a clear connection to the capital value of the business on sale as well as the immediate returns to shareholders.
However, it is the result of what has already happened in the past, rather than an indicator of the future direction of the business. Monthly management accounts are a great business tool, but still a discussion about last month and year to date. Financial planning revenues are reliant on a combination of new business income and recurring revenue. Almost all income is paid via a platform or provider and there is typically a six-week delay in receiving it. Some DFMs and SIPP providers pay quarterly. You will also have client withdrawals and departures to deal with. As the majority of firms work on an ad valorem basis, there’s also market movements to factor in.
To put this into context, when the market crashed at the end of March 2020 many firms reported their best ever month in April after that happened. The typical lag in revenue is around six weeks for recurring revenue and even longer for new business which has been signed up.
A growth dashboard will give you an idea about what’s coming and whether you can take action now to influence future performance.
The most obvious key metrics you might consider for your growth dashboard are:
- Funds under Management (or advice)
- Total income (initial and ongoing)
- Initial or ongoing income only
- Average case size (by fund size or fees earned)
- Total number of clients won or lost
There are other metrics which may give you a longer-term picture of the health of your business as it grows, and highlight areas where you might need to make improvements or adjust to cope with greater future demand:
- Source of leads
- Performance of professional introducers
- Client satisfaction and likelihood to refer e.g. Net Promoter Score
- Sales velocity and conversion ratios
Whatever your key metrics are, we want to make them readily available to you and the decision makers in your business. We don’t think you should be relying on out of date spreadsheets, or gut-feel opinion. We believe your MI should be always up to date, always available online, and presented in a way that’s easy to understand and enables you to take action.
That’s the purpose of Hatch. Great information to enable great decisions. Whilst the metrics might change from firm to firm, that singular purpose remains the same.
Stopping Silence
In the manufacturing sector it's quite common to monitor the speed and performance of individual parts of a manufacturing process, to assess where the bottlenecks are and what improvements can be made. We rarely do this in financial services, yet there is still a ‘product’, even if that’s now financial planning and advice rather than a tax wrapper.
One area where this is really apparent is the first few months when a client is new to your business.
It shouldn’t be underestimated how significant a commitment it is for someone to select you as their financial adviser. Whether they look at other firms or not, it’s a big moment for anyone, a real leap of faith. It might be a choice they make once in a lifetime, but we see it every day, so it’s easy to forget the significance.
In the process of signing up to your services, and expressing their hopes and dreams for the future, that client has disclosed more honest and personal information to you than they would give to almost anyone, possibly even their friends or family. They have trusted you with the burden of their financial future. They will feel exhilarated, liberated and excited.
And then... silence.
So often the momentum is lost as the advice gets stuck in the process.
It’s rarely anybody’s fault. Financial planning takes time and effort and a lot of information. It can easily get stuck with planners and paraplanners as they work through the detail. It can commonly get stuck with the client who hasn’t responded with all the information you require. It can even be sat waiting on a signature which you need to proceed. That’s without mentioning the telephone queue at an insurance company.
Silence can cause trust to break down.
What can help is visibility on where the advice is up to in the process. If you order anything nowadays you’ll receive countless emails and text messages telling you where it is, so this culture of constant service updates is becoming the norm, not the exception. It’s rare that there is a desperate need for a financial plan to be delivered quickly and by a certain date, but if your new client knows where it’s up to, and that everything is moving as expected, then that keeps in place the same level of trust and confidence that they had in you when they signed up to your services.
We can help in two ways:
- We can identify where each client is in the advice journey, how long they have been there, and where you might need to step in to make improvements. You will have the management information to make process improvements just like a manufacturing business.
- We can fill the silence with useful information. At each step of the journey we can automate emails, SMS or WhatsApp messages which give your clients whatever information you want to share with them. This needn’t be just service updates. You might want to provide them with some reading material or questions to consider ahead of a meeting, calendar invites to book in a meeting, or reminders about documents which haven’t been returned. You can automate as much of this as you like so it happens with no extra thought or effort.
Hatch is a solution designed to help business managers make great decisions by using high quality information.
Talk to us about how we can help.
Introducer Performance
A steady and successful supply of new clients from a professional introducer is the holy grail for most growing advice businesses. However, it takes a lot of time and effort to convert an initial agreement to introduce clients, into a consistent source of high quality new business.
One area we can help with is identifying the performance of new business leads.
We can easily show you how much business is coming in from each introducer by funds under management, or by expected fee, but we can also help you drill into the detail to understand:
- Number of leads referred by each introducer during discrete time periods
- Conversion ratio of leads
- Average client revenue per introducer
Some firms pay introducers a split of recurring revenue in perpetuity. This can be expensive if those introducers stop referring in clients and simply take income from leads passed over years ago.
Whatever the source of new clients, we know that ideal clients refer more ideal clients. An introducer who is consistently referring in clients you don’t really want will keep on doing that unless something changes. You might not spot it quickly enough to fix it without the right information to hand.
Reviewing this type of data has helped those firms identify which introducers they need to review their relationships with, revise their commercial terms for future deals and, where necessary, terminate agreements with existing introducers where the relationship is not working for them.
A very small number of high performing professional introducers, even just one, is more effective than a greater number of occasional hit-and-miss referrers.
Using gut-feel and subjective opinion, without the data to back it up, leads to biased decisions and waste. Doubling down on the introducers that work, by placing advisers in their offices, running events for their clients and taking their key people to social events, is an easy choice to make when you can identify who the best performers are.
Adviser Sales Performance
Who is bringing in the big bucks?
Where is the money at the moment?
Where are they getting their business from?
What’s their conversion rate like?
Want to find out more about how Hatch can help your business?
Book a demo today and lets talk.