Gone are the days when wholesalers were known as “walking credit cards,” dispensing drinks and rounds of golf while pushing product on advisors. Today, the talk is about adding value. The problem is, most of it has been just that — talk.
Recently, however, Standard Life Mutual Funds Ltd. of Montreal has put the value mantra where its mouth is.
Started by its Edinburgh parent in 1997, Standard Life’s business consultancy program emerged from a division that began consulting internally and then saw an opportunity to leverage its services outside the company to help independent advisors improve their businesses. The program was brought to Canada late last year as a way to get product onto advisors’ shelves by offering business services such as planning and valuation in much the same way advisors service their own clients.
“It is no different then what we do on a day-to-day basis with clients,” says Daryl Diamond, president of Diamond Retirement Planning Ltd. in Winnipeg, who signed on with the business consultancy program. “You sit down and find out their situation, objectives and goals. One of the key functions [Standard Life’s consultants] perform is determining where we are and where we want to be.
“If we sat around as a group [without them], we might come up with some of these things but not to the degree that they can — they know their stuff,” adds Diamond, who has worked in the financial services industry for 23 years.
A Standard Life consultant helped Diamond set priorities for each aspect of his business that generates revenue — administration, service, marketing and sales — and then assigned each an importance weighting. The next step was to determine which member of Diamond’s team would be responsible for each of those divisions.
“They don’t come in and say, ‘This is what you do.’ They make suggestions, they look to you as a group to see what your priorities are and what issues arise,” says Diamond. “It’s a great cause for introspection. All businesses run differently, and they don’t come in with one-size-fits-all solutions.”
Really facilitators
Standard Life’s 32-member consulting team examines the advisor’s business for weaknesses in areas such as strategy, management, the business process and customer service, and then offers solutions.
The Standard Life consultants are really facilitators who help the advisor focus on areas that need improving, making recommendations on how goals can be achieved. All services are free, although the goal is to encourage advisors to sell more Standard Life funds.
Diamond says that rather than just being able to say, “We had a good year,” the Standard Life program has helped his company put in place standards and benchmarks by which to measure its continued success.
Paul Edmond, a Winnipeg-based advisor and president of Edmond Financial Group Inc., says the program helped his company identify three key areas for improvement. Edmond had three one-on-one meetings with Standard Life consultant Jordy Chilcott; another half-day session included Edmond’s whole team. Six more half-day consultations are scheduled.
The first improvement was leadership and direction, areas that deal with Edmond’s mission statement, vision and core values. At the group meeting, Edmond and Chilcott went around the table and asked each of the eight-member team to describe the company’s vision. Edmond says it was an eye-opener to hear the variations from each employee, but helpful because it allowed him to compare it with his own vision.
The second area of improvement had to do with integrating a human resources platform and putting in place standards for education and performance reviews, as well as guidelines for a recruiting framework.
The third was the implementation of new client-management software and a new rating system to serve clients. Edmond and his team decided the best way to improve customer service was to send 2,400 memos to their clients and ask them to describe their ideal financial advisor.
One question asked how often clients wanted to be contacted and by what method — phone, e-mail or fax. Edmond currently has four client categories, but after the surveys are tallied, he hopes to have 20, covering everything from contact preferences to risk levels.
“I could have done it on my own, but would I have? No,” says Edmond.
“It’s great to put a financial plan together for a client but it’s no good if they don’t implement it. This is the same thing.”
Chilcott, vice president and senior consultant at Standard Life, says a byproduct of the program is to produce consultants who do wholesaling, not wholesalers who do consulting.
He also realizes that wholesaling is still about having a solid product line, but because there are so many mutual funds on the market, it’s essential to offer something more.
Edmond agrees: “After awhile, all products start to look alike, but it’s the service it offers that can really differentiate a company.”
Cost-cutting is another key area that Standard Life consultants emphasize.
After his meeting with Standard Life, Diamond realized there were parts of a financial plan he was working on himself that could just as easily have been delegated to another staff member.
“Master Chef”
“If I’m a master chef, do I need to go out and buy the groceries or chop the carrots?” asks Diamond. “You have to attach a cost to every duty in the office so you can make sure people are doing things they should be doing, and that someone who’s getting paid $500 an hour isn’t doing a job worth $20 an hour.”
Edmond found, after he and Chilcott went over a cost-evaluation sheet, that many clients were actually costing the company more to manage than they were worth.
“I’ve always said, ‘Big or small, we cover them all,’ but I realized I have to gauge the kind of service I give to small clients and the kind I give to big clients,” Edmond says.
As an outsider, Standard Life is better able to monitor and encourage a company’s progress and make sure that the work gets done. Each meeting is summarized and a report is sent back to the advisor to document progress.
Standard Life consultants make suggestions for improvements but don’t dictate how things are done.
Diamond agrees that this is probably something he could have done by himself, but the objectivity of an outside expert gave him a better perspective.
“You’re so focused on working in the business that you forget about working on the business,” Diamond says. IE