Boosting client capacity through greater efficiency

During an MLC Life Insurance webinar, partner education manager Marshall Ross discussed the importance of consistent client engagement and process efficiency in transitioning a once-off client to ongoing advice.

The lack of public understanding about what a financial adviser does is an ongoing issue for the profession, according to Ross, who explained that there are a number of misconceptions that hinder potential clients from seeking financial advice.

“They’ve got a level of uncertainty as to what financial advice actually entails, what it actually looks like, and how much it costs … People often want advice about some of these other areas, they’re just not sure where to start,” Ross said.

He explained that risk-only clients, despite having employed the services of a financial adviser, can also struggle to understand the benefits of holistic financial advice, highlighting a critical gap and potential opportunity for advisers to educate and engage them beyond risk advice.

“When it comes to our engagement with risk advice clients who may not potentially have that kind of need immediately for us when we’re seeing them, there’s an opportunity there for us to engage them over time,” Ross said.

“There’s a long-term value to engaging these clients, where those needs might pop up, they’re now familiar with us because they’ve had that initial engagement, we’ve demonstrated competency, service, support to them over these initial few years. As a result, they’re now wanting to engage with them.”

Ross explained that when advisers are looking to transition clients into an ongoing advice relationship, scale can play an important role in making it easier.

“So we may be bringing some clients in who are in that risk advice only position, but over time, we can transition them, through engagement, to being that ongoing advice client, and to do that we need to do it in a time-effective manner,” he said.

“This is where scale becomes really important, and it’s something that has become really quite visible in the data when we look at things like profitability. As scale increases, so revenue coming in the door increases, so generally does profit margins.

“We’re able to service those clients in a more profitable manner as we’re spreading our costs more efficiently, and commonly, we zero in, look straight away at this on, ‘OK, we need to have a really schmick onboarding process, how we deliver advice to clients, how we get clients on the door, we need to have a great process there’. That is certainly important.”

While he recognised the value in making the onboarding process more efficient, Ross said that advice firms should also be prioritising their processes for existing clients.

“One of the biggest time elements is how we manage our existing clients. We generally have more existing clients on our book then we have new clients that come through the door every year,” he said.

“The biggest opportunity to scale is through finding efficiency for managing that process, reducing some of the time that it takes to manage that process across that number of clients will give us access to more scale then, of course, having that great onboarding process.”

Ross added that advisers should assess each step of their client process to understand where they may be able to reduce time spent on tasks, providing both a more efficient service for the client and a greater opportunity to reduce costs and increase profitability for the adviser and their firm.