Transcript Document

Systemizing Your Business:
Getting HNW Ready
Pierre McLean, Vice President
National Sales
Getting HNW Ready
•
The HNW Opportunity
•
Strong Benefits of Being Client-Centered
•
5 Strategies / 3 Building Blocks
for Business Success
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Systemizing Your Business
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How To Get Started
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The HNW Opportunity:
A Growing Segment
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HNW
A Growing Market in Canada
Number of HNW Individuals
(Investable Assets Greater than $1 M Canadian)
10,400,000
12,000,000
10,000,000
Households
8,000,000
6,000,000
4,000,000
2,000,000
2,100,000
1,500,000
225,000
900,000
315,000
0
1996
2001
Canada
Source: Cap Gemini Ernst & Young, 2002
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2010
U.S.
The HNW Opportunity
Over half the millionaires have less than $2 M Canadian
of investment-ready assets (excludes primary home)
65%
32%
35%
30%
Affluent Canada
25%
19%
20%
14%
15%
13%
10%
4%
5%
5%
4%
2%
5%
2%
1%
0%
m
or
M
0
Canada (C$)
Source: Forrester’s Consumer Technographics 2002 North America Affluent Mail Study
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or
e
M
$1
9.
$2
$1
5
to
$1
4.
99
M
9
$1
0
to
to
.5
$7
99
M
9
to
$9
.9
$7
.4
M
$5
$4
.9
9
M
$4
to
$3
to
.5
$2
to
$3
.9
9
$2
.9
$2
.4
to
$2
9
M
M
9
M
9
$1
.9
to
.5
$1
.2
5
$1
$1
to
to
$1
.2
$1
.4
4
9
M
M
0%
Are You Already There?
Managing Assets
11.2 Million
% of
Canadian
Adults
with Stock
Ownership
(Direct or
Through
Funds)
50%
40%
Growth by
Assets and
Clients
30%
20%
Team
Process
Structure
10%
0%
1983
Talking to Clients
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1986
1989
1996
2000
2002
Five Strategies for Success
1.
Focus on affluent private clients
2.
Use the investment consulting process to
differentiate yourself from competition
3.
Manage your practice as a business
4.
Partner effectively with institutions and other
professionals
5.
Commit to ongoing learning and execution
Source: CEG Worldwide
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Everyday Advisor vs.
HNW Advisor
The Everyday Advisor
The HNW Advisor
Fragmented, inconsistent
Focused, consistent
Extreme competition
Low or no competition
Poor staffing situation
Well functioning team
Works too hard, on the wrong stuff
Work gives positive energy, rejuvenating
Works with low creativity
Works with high creativity
Low HNW familiarity
High HNW familiarity
Gives away too much for free
Charges for experience
Low independence
High independence
Business controls advisor
Advisor controls business
Competes on price and product
Competes on business process and solutions
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The Client:
Everyday Advisor vs. HNW Advisor
The Everyday Advisor’s Client
The HNW Advisor’s
Client
Low level of loyalty
High level of loyalty
Drains staff time
Worth staff time
Low level of commitment
High level of commitment
Price shops
Price no issue
Not a predictable future
Very predictable future
Low level of response
High level of response
Less fun, no challenge
More fun, challenging issues
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Building Blocks to Success
“Franchise Value”
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Building Block: Articulate
Creating distinct value
separates you from the
crowd
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“Value Diffusion Factor”
Price-Performance of all transactions for a major CDN brokerage firm
High Revenue Productivity
Value creation
Transactional
Recurring
Wrong direction Right into the
Trap
Low Revenue Productivity
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Systemizing Your Business
Delivering on the
promises articulated in
your DVP.
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Engineering Your Practice
for Growth
Team Alignment
Segmentation
Client Service
Matrix
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Client Service
Process
Planner
Client Service
Scheduler
Engineering Your Practice
for Growth
WHO
BY WHOM
HOW
WHAT
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WHEN
Segmentation is the Start
of Systemizing Your Practice
Delivering on the
promises articulated in
your DVP.
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Segmentation Guidelines
Limit of 5 client relationship dimensions
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AUM
Commission or revenue
Future potential (e.g. Income, inheritance, cross selling…)
Referrals provided in last 12 months
Time required to service
Personality (e.g. Difficult or easy to deal with)
Part of a Key Target Group
Centre of influence
Candidate for fee based-business
Related to a top client……
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Segmentation Guidelines
Typical Breakdown
A+
Drivers
top 2%
A
High Priority
next 18%
B
Movers
next 10%
C
Maintenance
next 50%
D
Low Priority
bottom 20%
100%
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Practice Capacity Worksheet
Segment
Proactive
time/year
Reactive
time/year
Total time/year
Top Priority
8.8
11
19.8
Average
5.3
5
10.3
Low Priority
2.7
2
4.7
Face to Face
Telephone
Top Priority
3
8
Average
2
4
Low Priority
1
2
45
40
19
21
945
19
50
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The Impact of Focusing on the
Top End
Target
Production
Goal
2004
Current
Production
2003
Difference
$ 500,000
$ 300,000
$ 200,000
Revenue
From Best Client
$ 15,000
# of new Clients
Needed
13-14
Revenue-Asset Diagnostic
Segment
# of Households
A+
5
A
24
B
14
C
60
Assets (expressed as a % of total assets)
Total
Revenue (expressed as a % of total revenue)
Total
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D
63
Total
166
High Recurring Revenue
Low Transactional Revenue
Developing Your Core Systems
Delivering on the
promises articulated in
your DVP.
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The ICP:
Building the experience
Source: Financial Advisor at the Epoch
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Client Service Matrix
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Client Service Matrix
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12
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8
8
5
Building Your
Entrepreneurial Team
Delivering on the
promises articulated in
your DVP.
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Service Process Planner
Client Advisory Council
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4x
year
Service Process Planner
Client Advisory Council
-Forum for Top
Clients to offer
feedback
-Gets them
involved
-Improves our
Services
-Creates Advocates
4x
Book high-end
location
Private room
Pat
Invite/Confirm
6 clients +Team
CA/COI
Pat
admin/greeter
Cindy –
Service Update
Me - presenter/
primary
relationship
Pat
Reinforces
beliefs in our
process and in
our Team
year
Send Agenda and
Materials to review
(1 wk)
Cindy
Thank You Gift:
Bottle of Ice
Wine
Focus group
around business
or market
expertise
Facilitate Topics/
reviews
Pierre
-Metrics
-Progress Report
Follow-up letter on
ideas raised
& plans to execute
Pierre/Cindy
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Show up - all prep looked after
More strategic relationship w CAs
I want to evolve to Board of
Directors
Prep work
Entrepreneurial Team Snapshot
Source: Financial Advisor at the Epoch
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The Extended Team
YOU
Vision Builder
Relationship Manager
Strategic Thinker
Success Coach
COI
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INTERNAL
SPECIALIST
CLIENT
TEAM
Value of Systemization
Systemizing your business promotes your
value as a HNW advisor!
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Focus on the HNW Opportunity
Frees up your time
Take control - don’t be controlled
Allows you to become more proactive
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How do I get started?
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Executable Tools to Help
Your Practice
Distinct Value Proposition
Why Diversify?
Pre-Meeting Kit
Ideal Client Profile
Volatile Markets
Ideal Client Experience
Segmenting Client Base
Asset Allocation
Optimal Client Interview
Service & Team Alignment
Dollar Cost Averaging
The Client Binder
Releasing Unprofitable Clients
BestBuilt
Loyalty Ladder
Investment Policy Statement
GIC to Equity
Getting Referrals
Practice & Profitability
Tax Class Funds
Client Feedback
Fee-Based Model
Guide to Retirement
Emotions, Expectations,
Economics
Reasons for Optimism
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Continuum of Investment
Management Solutions
$1,000,000+
INSTITUTIONAL
(Mutual Funds – Series O – plus Pooled &
Segregated account management)
PRIVATE PORTFOLIO MANAGEMENT
$1,000,000
$500,000
(Discretionary Stocks & Bonds, Balanced Mandate)
PRIVATE PORTFOLIO MANAGEMENT
(Discretionary Stocks & Bonds, Specialty Mandate)
$250,000
FRANKLIN
TEMPLETON
INSTITUTIONAL
TAPESTRY POOLED PORTFOLIOS
(Pooled portfolios, sold by Offering
Memorandum)
FRANKLIN
TEMPLETON
INVESTMENTS
PRIVATE
CLIENT
GROUP
SEPARATELY MANAGED ACCOUNT PROGRAM
$100,000
(Third-party separate account sub-advisory services)
QUOTENTIAL PROGRAM
$25,000
(Mutual fund wrap portfolios, sold by Prospectus)
$500
RETAIL MUTUAL FUNDS
(Individual Funds, sold by Prospectus)
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FRANKLIN
TEMPLETON
INVESTMENTS
Questions
& Answers
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Your Roadmap to Building
A High Net Worth Business
Pierre McLean, Vice President
National Sales