The final piece in the puzzle (at this stage) is creating your client proposition.
What to do
Having identified your ideal client, and gained an understanding of exactly what service they actually need, it’s time to consider how you will create it. Your proposition is likely to consist of these key elements:
- Which risk profiling tool you use
- Your back-office system
- Which cashflow planning tool you use
- Which research tools support your advice process
- Your selected platform
- Your centralised investment proposition (CIP)
These things will all need to interlink with one another to a degree. This means decisions should be arrived at bearing in mind the entire advice journey for your client, not just each individual element.
You should be considering exactly what you need from which element, what are your essentials and what are your nice-to-haves.
Try to be open-minded with this; a back-office system isn’t always just a back-office system in this day and age, with some acting more like a platform. Equally, a risk-profiling tool can come in various different formats, including being nothing more than a blank piece of paper where you log your discussions around risk with a client.
So don’t get hung up on the labels. Think about what you and your clients will need, and see what systems and tools are available to support that.
What to expect
You should expect it to take a lot of time! We have carried out reviews of various back-office, risk profiling, research and cashflow tools. This involved getting demos of the systems, followed by free trials where available, and the whole process ultimately took months.
Our aim was to help speed this task up for our firms, and it's clearly something that's needed as it was quite an onerous process. So be prepared to spend a bit of time on this; it will be worth it to get the right framework in place.
You should also expect to hear lots of talk about application programming interfaces (APIs) and integrations. This is where one system talks to another and would be a dream if it all worked properly.
But in our experience the existing integrations, while occasionally useful, are not ground-breaking (yet), and are certainly not enough to make an otherwise unsuitable piece of software, suitable.
What to avoid
Making a decision based just on the lowest cost is unlikely to result in the most suitable tool for your business. This stuff will have a massive impact on a day-to-day basis, so your choices should be made on appropriateness and inherent value, rather than cost alone.
You should also avoid only hearing the gloss and the good stuff, and factor in what happens if or when you decide to leave a particular system or change provider. Hopefully that won’t happen, or certainly not frequently as it can be very disruptive. But making sure you know exactly what will happen in the event it doesn’t work out can prevent any big issues later down the line.
Finally, try to not get too hung up on the process right away; processes are incredibly important and will ensure consistency for your clients. Trying to nail them down before you’ve even started is likely to result in them needing to be rewritten.
Get things underway, work with some clients, have some reviews and chats, and build your processes around what feels natural for you and your firm.
The last step will be your platform selection and CIP and you can read more about this here.
If you're thinking of going it alone, all that remains for me to say is to wish you good luck!
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