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Forward Thinking Magazine : April 2011
53 Como Financial Services’ business is also built on referrals. Sam Hunt observes that “accountants really understand the importance of cashflow, given they deal with businesses on a day to day basis.” Como also gets referrals from family law solicitors who recognise some clients need money advice during or following a divorce. capture the client – as well as reaching new clients at the start of their financial journey you can strengthen and build these relationships throughout all stages of the investing lifecycle. You can provide added value through ongoing money management and be well placed to assist when clients are ready for more advice and other services. “Once we’ve worked in the [cashflow planning] sector, working closely with families and their children, clearly it then leads to a lot of risk management and estate planning at a younger age than we would do with an investment client,” John Stinson says. Build efficiencies – review your back office systems, processes and providers to streamline your cashflow service and maximise profitability. Technology can help build efficiencies and scale within your practice, making it less labour intensive and reducing your cost per client. Be targeted – decide which types of clients this strategy is most appropriate for. Consider demographics such as age, sex, marital status and income bracket. Also, where are your potential clients on their financial journey? Are they recent graduates starting their first job, high income earners spending everything they earn, first homebuyers, new families or perhaps recent retirees? Be a specialist – who in your practice has the right skills to become your cashflow experts? Who will your clients relate to? John explains, “it is important to us that we employ young advisers and we bring them through and assist them in building a portfolio of clients in their own age and demographic. So while I can give a disciplinary chat to a 22 year old, I’m not the best long term person for that client. Conversely a 48 year old doesn’t want a 25 year old telling them how to manage their cashflow.” grow your business – a common challenge facing advisers is how to charge for cashflow services. Options include a one-off advice fee to help clients set up an efficient cashflow strategy. Ongoing cashflow management can generate a regular fee stream, such as annual fees. Adopting a percentage fee for service may help your fees grow along with the size of your clients’ portfolios. With a trend towards fee-for- service and a possible move to annual ‘opt in’ consent for fees, cashflow management can help you demonstrate ongoing value for your clients. Plus, as you deepen your client relationships you may find opportunities to generate revenue from other services, such as loans, risk management or investments. Do clients object to fees for cash management? Sam Hunt doesn’t think so, “we find it really becomes quite a compelling service offering to the client given they know how much they can afford to spend or not spend or allocate towards their goals... they can see where their money goes.” demonstrate how you can add value – with high levels of debt, low saving rates and demand for information on money management, this is an area where advisers can demonstrate significant ongoing value to clients. This may become increasingly important under the Government’s proposed introduction of an annual opt-in agreement for advice. Sam Hunt has noticed that “clients are becoming better educated and there’s a lot more information in the media about potential legislative changes. There’s an article on financial planning every day of the week. They’re certainly more aware and questioning and looking for a compelling service offering... I believe the cashflow solutions we offer are compelling to a client and they’ll continue on that basis.” He adds, “It’s quite a liberating feeling knowing things are under control.” cash