Practical World Experiences Post FOFAmydealerservices.com.au/wp-content/uploads/2014/02/Russell-Pod1.pdf · Practical World Experiences Post FOFA MDS PD Day Terry Tyrrell – Russell

Practical World Experiences Post FOFA MDS PD Day

Terry Tyrrell – Russell Investments

Disclosures

Issued by Russell Investment Management Ltd ABN 53 068 338 974, AFS Licence 247185 (“RIM”). This communication provides general information only and has not been prepared having regard to your objectives, financial situation or needs. Before making an investment decision, you need to consider whether this information is appropriate to your objectives, financial situation and needs. This information has been compiled from sources considered to be reliable, but is not guaranteed. Past performance is not a reliable indicator of future performance.

Copyright © 2014 Russell Investments. All rights reserved. This material is proprietary and may not be reproduced, distributed or transferred in any form without prior permission from Russell Investments.

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Agenda

› Client value proposition

› Three components

› Client engagement roadmap

› The WOW review process

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Thinking about your business… where do you add value?

› How is your business different?

› Why should a client choose you over your competitors?

› What do you provide that is different to what they could get

elsewhere?

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What is a value proposition?

A simple, clear statement of who the target customers are and precisely what key benefits you offer.

When done effectively, the Value Proposition should

accurately articulate the experience of working with

your business.

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Russell example

Value proposition to advisers

Value statement: Russell delivers consistent relative returns for clients, giving advisers peace of mind. Our global

reach, unparalleled resources, blue-chip client base and unmatched experience also provides

advisers with a feeling of trust and security.

Proof points:

All funds have outperformed their median manager and multi manager peers.

Russell operates in 46 countries worldwide and employs over 700 investment professionals.

Russell is global leader in multi-manager investing.

Russell directs the investment of over $195 billion for the world’s largest pools of capital.

Russell’s client list include: Bill and Melinda Gates Foundation, BHP Billiton

Millions of individual investors use Russell’s services.

Delivery statement:

Russell builds institutional quality portfolios that are diversified at three levels:

Multi-asset

Multi-style

Multi-manager

Note: Past performance is not a reliable indicator of future performance

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Why do I need a value proposition?

Being able to get the word out about the services or

products you can deliver is one of the most effective

ways to grow your business.

The value proposition helps to ensure your message sticks.

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Value of a value proposition?

Before

Assets under management = $30 million

Number of clients = 190

Revenue per client = $866

Product sales focus

Large majority commission revenue

Principal responsible for sales and service

Case study

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Value of a value proposition?

After 20 months

Assets under management = $330m

Number of clients = 166 (24 LESS)

Revenue per client = $8,577 (10x)

Minimum account size = $2m

Revenue is >90% fee based

100% of new business from client referrals

Dedicated functional teams – Sales, Service, Ops

Principal as relationship quarterback

Case study

Today

the business

is approaching

$500m AUM

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Russell’s Client Engagement Road Map

› Provides a framework for your clients’ experience

› Systemise your communication

› Provides tailored solutions

› Provides a template for reviews

› Chart key client milestones

› Demonstrates and articulates your value

› Get credit for all the work you do

› Removes onus on performance

› Facilitates discussion

Giving your clients ANOTHER reason to recommend you

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Why use the Client Engagement Road Map?

› Enables you to not only do great work for the client but make

sure they know about it!

› Outlines the scope of the client engagement and allows for

CREATION, PRIORITISATION and COMPLETION of appropriate

strategies on a regular basis.

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Q1 – Office •Goals Review •Roadmap •Investment Review •Financial Plan Update •Revisit Risk Profile •Other Accounts •*Equities

Q1 - Office

•Financial planning •Data Gathering •Risk Tolerance •Long term plan •*Diversification

Q2 - Meeting •Goals Review •Roadmap •Investment •Implementation •Life Insurance •*Budgeting strategies

Q3 - Phone call

•Goals Review •Roadmap •Income protection •Mortgage review * Long-term view

of the Market

Q4 - Venue TBC

•Roadmap •Client Satisfaction •*Client Information evening

Q2 - Phone call •Goals Review •Roadmap •Tax strategies •*Superannuation

Q3 – E-mail/ printed material

•Goals Review •Roadmap •Market reports •Superannuation •Legislation updates •Risk Review •*Gearing

Q4 - Home •Goals Review •Roadmap •Investment Review •Risk review •New prod/services •*Risk

Road Map for Mary and John

Client

This sample material is for Financial Professional educational

use only and is not for distribution to current or potential

investors.

*Educational

topic

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2nd Qtr Meeting •Goals Review •Roadmap •Investment • Implementation •Life Insurance •*Budgeting strategies

3rd Qtr Phone call

•Goals Review •Roadmap •Income protection •Mortgage review * Long-term view

of the Market

1st Qtr

•Financial Planning •Data Gathering •Risk Tolerance •Long term plan •*Diversification

4th Qtr •Roadmap •Client Satisfaction •*Client Information

evening

1st Qtr •Goals Review •Roadmap •Investment Review •Financial Plan Update •Revisit Risk Profile •Other Accounts •*Equities

2nd Qtr •Goals Review •Roadmap •Tax strategies •Superannuation

3rd Qtr •Goals Review •Roadmap •Market reports •Superannuation •Legislation updates •Risk Review •*Gearing

4th Qtr •Goals Review •Roadmap •Investment Review •Risk review •New products/services •*Risk

1st Qtr •Financial Planning •Data Gathering •Risk Tolerance •Long term plan •*Diversification

This sample material is for Financial

Professional educational use only and is not

for distribution to current or potential investors.

*Educational topic


Client

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This sample material is for Financial Professional

educational use only and is not for distribution to current

or potential investors.

*Educational

topic

1st Qtr-Office

• Financial planning • Data Gathering • Risk Tolerance • Long term plan • *Diversification

2nd Qtr Meeting • Goals Review • Roadmap • Investment • Implementation • Life Insurance • *Budgeting strategies

3rd Qtr Phone call

• Goals Review • Roadmap • Income protection • Mortgage review * Long-term view

of the Market

4th Qtr-Venue to be confirmed

• Roadmap • Client Satisfaction • *Client Information evening

1st Qtr-Office • Goals Review • Roadmap • Investment Review • Financial Plan Update • Revisit Risk Profile • Other Accounts • *Equities

2nd Qtr-Phone call • Goals Review • Roadmap • Tax strategies • *Superannuation

3rd Qtr Email/ Printed material

• Goals Review • Roadmap • Market reports • Superannuation • Legislation updates • Risk Review • *Gearing

4th Qtr Home • Goals Review • Roadmap • Investment Review • Risk review • New products/services • *Risk

FIRST YEAR

Current Future Completed

SECOND YEAR


Client

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investors.

*Educational

topic

1st Qtr-Office



3rd Qtr Phone call


of the Market








FIRST YEAR


SECOND YEAR


Client

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1st Qtr-Office



3rd Qtr Phone call


of the Market








FIRST YEAR


SECOND YEAR


Client



investors.

*Educational

topic

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Client 2nd Qtr Meeting • Goals Review • Roadmap • Investment • Implementation • Life Insurance • *Budgeting strategies

3rd Qtr Phone call


of the Market

1st Qtr

• Financial Planning • Data Gathering • Risk Tolerance • Long term plan • *Diversification

4th Qtr • Roadmap • Client Satisfaction • *Client Information

evening

1st Qtr • Goals Review • Roadmap • Investment Review • Financial Plan Update • Revisit Risk Profile • Other Accounts • *Equities

2nd Qtr • Goals Review • Roadmap • Tax strategies • Superannuation

3rd Qtr • Goals Review • Roadmap • Market reports • Superannuation • Legislation updates • Risk Review • *Gearing

4th Qtr • Goals Review • Roadmap • Investment Review • Risk review • New products/services • *Risk

Customise this Example for

Your Business and Your Clients



investors.

*Educational

topic

› Constructing your service offer

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Discussion

Why do your client’s pay you?

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Constructing your service offer

› Discovery process

› Planning tools

› Advice documentation

› Implementation

› Ongoing service and support

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Formulating your service matrix

Financial advice (A-grade clients)

Discovery process

Planning tools

Advice documentation

Implementation

Ongoing service

Low touch (B-grade clients)

Discovery process

Planning tools


Implementation

Ongoing service

Transition Strategy (C and D-grade clients)

Discovery process

Planning tools


Implementation

Ongoing service

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Ongoing service model (A-grade clients)

› How often do you conduct reviews? In person vs. via the

phone?

› How should those reviews be structured?

› What additional personal touches should you implement?

› What special events or client appreciation events should

you deliver?

› Other ideas?

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› The WOW review

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The WOW review – impact on profit per principal

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Key Value Driver Yes No

Documented review process? $390,456 $159,182

Formally ask for feedback? $520,336 $298,970

10+ A-grade client contacts per year $443,950

5-10 A-grade client contacts per year $314,084

<5 A-grade client contacts per year $114,732

Source: Business Health White Paper, 2009

The WOW review

› Improve the overall experience

› Focuses on client’s goals

› Emphasize what is within your control

› Put market/performance in proper context

› Requires creativity and consistency

› Will require increased effort on your part

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Three things to consider

1. Review components and sourcing

2. Process for timely/efficient production of materials

3. Checklists to ensure quality

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Goals-based reporting

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Immediate follow-up contact

It was truly a pleasure meeting with you and Linda this morning using the

benefits of technology. Both of you are really wonderful people, and it is my

sincere pleasure to count you among my friends and clients. I thought a quick

summary of the "to-do" items from our meeting would be helpful.

Life Insurance….(brief summary)

Estate planning…(brief summary)

Cash reserves…(brief summary)

As agreed, we need to following from you as soon as possible…

We will be working on the following…

We truly value our relationships with you. Please don’t hesitate to contact our

office with any questions or concerns.

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The WOW review

› What is in your WOW Review package?

› What is the source of each component?

› Who is the owner of each component?

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WOW Package Components Source Owner

The need for process

The study…

”found that only a small group of

advisors truly practice the relationship-

oriented, process-driven approach that

defines wealth management.”

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Source: “Best Practices of Elite Advisors. The Wealth Management Edge”. October 16, 2007

Survey of 2,094 advisers with at least $50 million assets under administration.

http://cegworldwide.com/index.php

WOW process

2. Determine the timeline required to create the whole

experience

› Setting appointment

› Preparing materials

› Reviewing materials

› Delivering the review

› Follow-up

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WOW review assignments

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Days Component or Action Owner

-20 Pull file for quarterly meeting

-19 File to adviser for review

-17 Phone client to set appointment

-17 Send meeting reminder

-17 Update Discovery Agreement

-17 Update CRM

-17 Update goals-based Reporting

-15 Prepare mail – Letter, discovery agreement, Road Map

-11 Mail Package – Letter, discovery agreement, Road Map

-11 Select/prepare education piece

-11 Prepare other reports for Meeting Package

-8 Other agenda items – based on client request

WOW review assignments

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-7 Assemble Draft Meeting Package

-5 Review Meeting Package

-2 Re-review Meeting Package

-0 Facility check

0 Meeting takes place

0 Write meeting notes and action items

0 Follow-up email/letter is composed

0 Email/letter sent to client

0 Next meeting tentatively scheduled

0 Send gift or other consideration

+1 To-do’s assigned

+2 File is closed

WOW review assignments (homework)

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WOW process

› Develop checklists to make sure you execute

› Reception/greeting checklist

› Meeting room checklist

› Post-meeting checklist

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Why have checklists?

“No institution can possibly survive if

it needs geniuses or supermen to

manage it. It must be organized in

such a way as to be able to get

along under a leadership composed

of average human beings.”

Peter Drucker

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What have you done for me lately?

› Redefining client reviews

Putting reviews in context

› Move to fee for service = more client meetings

› Achieving positive meeting outcomes a necessity

› Success is not measured by client acceptance

› Meetings are always a matter of personal style

› Most common reason advisers lose clients is…

› markets/returns

› competitor

› change of needs

› lack of relationship

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Setting the tone and developing the agenda

› Positioning the meeting

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Why hold reviews

› is it because...

› compliance makes me

› clients want them

› I like to show off

› do you prefer...

› client events

› group presentations

› passive investors

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Key purposes of a review

•Changes to the client’s circumstances and how they responded

•Understand client’s perspective and headspace Situational awareness

•Factual information about the economy and markets

•Implications to their portfolio and long-term goals Reasoned perspective

•Confirm they are still valid, appropriate and inspiring

•Include both financial and non-financial elements Review goals

•Take into consideration changes in circumstances and goals

•Again, include both financial and non-financial elements Update plan

•Committed to long-term goals and the plan to get them there

•Your role as key to achieving these goals Deeper relationship

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What not to do

› serve lousy coffee

› don’t prepare, it’s not a new client

› keep the focus on investment returns

› do most of the talking

› drown clients in details

› agree to do everything the

client wants

› avoid talking about fees

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The pre-meeting checklist

› meeting itself is well communicated

› team knows the clients are coming

› names and drinks where appropriate

› meeting room is clean and inviting

› familiar with their circumstances

› not rushing to (or from)

another appointment

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Conducting the review meeting

› The heart of the matter

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Four phases of the client review meeting

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Opening

• set the tone

• confirm the agenda

• 5 to 10 mins

Words

• cover the agenda

• focus on client

• 20 to 50 mins

Numbers

• review and discuss

• reach agreement

• 25 to 50 mins

Closing

• summarise discussions

• confirm next steps

• 10 minutes

The opening

› reconnect with the client

› positively framed question

› ensure agenda is relevant

› is anything urgent

› is anything missing

› deepen engagement in meeting

› what would make this a great meeting

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Opening

• 5 to 10 mins

Words

› first discuss item(s) added to agenda

› Review and discuss:

› milestone events

› change in circumstances

› progress towards goals

› reaction to market volatility

› long-term vision

› general quality of life

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Words

• 20 to 50 mins

Numbers

› overall financial position

› portfolio performance

› economic developments, trends and

implications

› current asset allocation and appropriateness

› implications of recommended changes

› agreement on changes

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Numbers

• 25 to 50 mins

Closing

› review and confirm

› market conditions

› asset allocations

› action items

› identify a highlight

› create a positive image of the future

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Closing

• 10 minutes

“What have you done for me lately”

› Demonstrating value

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What have you done for me lately?

› How often do you meet with clients?

› What do they think you do between meetings?

› Do clients know exactly what you do for them?

› How do you reinforce this?

› What are they really looking for?

› investment philosophy

› peace of mind

› Have you asked them what they want?

› Have you asked your team what they deliver?

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For effective client engagement

› Practical tools and techniques

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FINANCIAL PROFESSIONAL USE ONLY

Point of maximum

financial opportunity

Optimism

Relief

Hope

Denial

Capitulation

Fear

Despondency

Panic

Depression

Desperation

Anxiety

Euphoria

Thrill

Excitement

Optimism

Point of maximum

financial risk

Where are we now? Depends on which market you are looking at ……

Dec-Feb

Mar-Jun

Aug

SOURCE: Russell Investments

The family tree

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What next?

› For further help speak to your Russell BDM!

p.55

Documents

Practical World Experiences Post FOFAmydealerservices.com.au/wp-content/uploads/2014/02/Russell-Pod1.pdf · Practical World Experiences Post FOFA MDS PD Day Terry Tyrrell – Russell