Four keys to success- Best practice makes perfect

01 October 2007 Esm? Davies, Celestis

In an extensive survey of 2 094 top US financial advisers, CEG Worldwide isolated the most successful and set about identifying what they have in common. It was found that they have fewer clients, bigger incomes and a different way of doing business, characterised by four key factors.

Experience is a hard teacher because she gives the test first, the lesson afterwards," said Vernon Law, an American Baseball pitcher. But CEO of CEG Worldwide, John Bowen, stresses in an article in Financial Planning (, "Advisers can learn from studying the (best) business practices of their most successful peers."

Can we learn from these practices, each with a minimum of $50 million in assets under management? Let's consider the four key factors from a South African perspective.

1. Focusing on client needs

We all believe that our advice process is client needs focused. However, we need to align our service offerings to client needs while ensuring that we differentiate services according to our client base segmentation at the same time. The secret is giving efficient service at all times and excellent service where appropriate. The result is a very satisfied and profitable client base.

2. Asking for referrals

Most advisers will tell you that they dislike prospecting yet top advisers who ask for referrals tend to get them. If you could clone your A-category clients you would have the formula for success – and you can come close to achieving this. Your top clients are going to associate with other top people – friends, relatives and colleagues. Ask them for referrals and you're likely to meet others like them.

3. Specialisation

It has become conventional for advisers to specialise. Today, we find advisers focussing exclusively on investment, risk, employee benefits or healthcare portfolios. The results speak for themselves as success raises the experts amongst these advisers to the top. The only question is how the clients' other needs are catered for if an adviser focuses on a narrow field of specialisation? The answer is outsourcing through association. By formalising business relationships with other specialist advisers, you can ensure holistic coverage of all your clients' financial requirements.

4. Outsourcing

DIY and 'reinventing the wheel' are tendencies many find difficult to let go of. Financial advisers have core competencies and most of these are related to offering financial advice to their clients. Why then spend enormous amounts of time on other matters, when we could hire someone to do the job while we attend to what we do best – advising clients face-to-face? The costs of a bookkeeper or an administrator or even a practice manager are all much less than the lost opportunity cost when an adviser takes on these responsibilities. In fact, these costs become an investment if they allow advisers to spend more time doing what they do best.

Each of these key factors could be the subject for a lengthy discussion and the application of each could make a material difference to any South African financial advisory practice. Why not put these issues on the table for the next management meeting?

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