Integrated offerings keep clients on side

06-Mar-2017

By Sarah Kendell

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Advice practices seeking to create an extra business arm to their core financial planning services need to structure their operations through the lens of the client rather than operating two separate and siloed divisions, according to Macquarie.

In an interview with financialobserver, Macquarie head of wealth sales David Clatworthy said the most successful of the 120 practices in the group’s Virtual Adviser Network (VAN) were those who fully integrated other business arms such as accounting within their practice.

“It comes down to a shift in the mindsets of the partners from ‘I’m running a business for business’s sake’ to ‘I’m running a business through the client experience lens’, and that starts to make them think a lot differently about the future of the firm and how they operate,” he said.

“It’s no longer about holding on to the clients because they create revenue that’s correlated to me as an adviser or an accountant – it actually makes sense to have multiple people involved in the client relationship because it’s a better experience for them, and also from a retention perspective, if the client has multiple touch points.”

For firms that offered accounting and advice, it made sense to bring the two businesses closer to improve the profitability of both sides, given that there were stages in any client’s life where they would need one service more than the other, Clatworthy explained.

“The mature businesses are spending more time thinking through the life cycle of both the clients and the partners within the business – for accountants who have been running a book of [small to medium enterprise] clients, those needs are going to significantly change from needing an outsourced [chief financial officer] service to realising a business asset and maintaining it through retirement age,” he said.

But increased convergence did not necessarily mean more aggressive cross-selling within business divisions, said HLB Mann Judd wealth management partner Michael Hutton, who had worked with the VAN for two years on improving operations between his firm’s accounting and planning arms.

“I don’t want our tax guys to try and sell wealth management and I don’t want to try and sell tax advice – it’s more that if someone has a tax issue, I can identify that, and I don’t know what the answer is but I’ve got 10 people over here who do, so let’s provide the service the client needs,” he said.

“The way I look at it is it’s just the way we do business – when it comes to providing a client with a service that they can really benefit from, it’s my duty to do it.”

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