Latest / Financial Planner Life Podcast / Why Up To 72% Of Your Financial Planning Client Book Costs MORE To Serve Than It EARNS. - Pillar Client Services

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Why Up To 72% Of Your Financial Planning Client Book Costs MORE To Serve Than It EARNS. - Pillar Client Services · Financial Planner Life Podcast

• 0:04
  SPEAKER_01: Today on the financial functionality local.
• 0:06
  SPEAKER_01: We welcome from the from the climbing businesses.
• 0:10
  SPEAKER_01: And we can do deep lossing on climbs within the books of financial funding businesses.
• 0:17
  SPEAKER_01: They have a listening food within this point exactly when you can save time and money by segmenting clients to the hill climbing services without losing climate.
• 0:32
  SPEAKER_01: It's a fantastic episode.
• 0:34
  SPEAKER_01: This is a very unique product for financial planning companies or anybody looking to grow their advice business through acquisitions.
• 0:42
  SPEAKER_01: So if you're a financial planning business that feels like your time is being taken up by non-profitable clients but you don't want to lose them, you're gonna love this episode.
• 0:54
  SPEAKER_01: So, Brian, thank you so much for joining me today on the Financial Planner Life podcast.
• 0:58
  SPEAKER_01: How are you?
• 0:58
  SPEAKER_00: Very good, thanks for having me.
• 1:00
  SPEAKER_01: You're very welcome.
• 1:00
  SPEAKER_01: Flew down from Scotland this morning.
• 1:02
  SPEAKER_00: Just to see you, Sam, yeah.
• 1:04
  SPEAKER_00: Just for this, yeah.
• 1:05
  SPEAKER_00: Well, I appreciate it.
• 1:07
  SPEAKER_00: You're welcome.
• 1:07
  SPEAKER_01: And so do the Financial Planner Life audience.
• 1:09
  SPEAKER_00: Yeah.
• 1:09
  SPEAKER_00: I hope they do.
• 1:10
  SPEAKER_01: So, first off, just tell us a little bit about who you are and what your company does.
• 1:14
  SPEAKER_00: Yeah.
• 1:15
  SPEAKER_00: Um look, I I've been around the industry for a long time, um, twenty-seven plus years now, um, but always been a sort of a distribution guy.
• 1:23
  SPEAKER_00: So always been on the sort of a sales side.
• 1:25
  SPEAKER_00: Um, yeah, from the very early stages of Prudential all the way through to Wrathbones and Octopus and um various different degrees of seniority, uh, and yeah, spent most of my time in front of IFS, um, small, medium, and large, the great and good of the industry over the past 20 odd years.
• 1:41
  SPEAKER_00: So um yeah, I've been around the block.
• 1:44
  SPEAKER_01: So you've got um pillars client services now, that's your company.
• 1:48
  SPEAKER_01: Can you just tell us a little bit about what that company does and why you created it?
• 1:52
  SPEAKER_00: Yeah, yeah.
• 1:53
  SPEAKER_00: Um I guess it follows on from you know my journey in the industry.
• 1:56
  SPEAKER_00: I I probably about six years ago I became a little bit disillusioned by let's say product providers, manufacturers, because I worked for them and I saw firsthand what they were truly like.
• 2:09
  SPEAKER_00: Um and the reality was we sent people into IFE offices all up and down the country, and we asked them to be consultative and we asked them to build relationships and be caring uh and and fundamentally make them like you.
• 2:21
  SPEAKER_00: Uh and then then we listened to all their problems and we told them that the solution to their problem was a product or a fund.
• 2:27
  SPEAKER_00: And the reality was we'd spent you know an hour or whatever listening to all these troubles that the answer that we were given was never really the answer.
• 2:35
  SPEAKER_00: Um and the problems that were telling us we were not doing anything with those problems, we weren't taking them back to our businesses and saying how can we really help these IFAs because there's some real inherent problems and troubles in there that you know if we actually spent time as an industry we could probably overcome some of it.
• 2:50
  SPEAKER_00: So so yeah, so I I I spent um the past five years um through my MBA journey, um, first of all, for two and a half years, uh really digging into the sort of real challenges that the the industry faces.
• 3:02
  SPEAKER_00: Um, spending time with about 250 IFA firms, um and on the manufacturer side as well, I interviewed about 150 C-suite executives uh to really get a sort of a deep understanding of why there's a lack of innovation and why there's a lack of sort of a change in our industry.
• 3:18
  SPEAKER_00: And I know more recently AIs came to the fore and challenged that in many respects, but for me it was a sort of a real body of work to see what truly are the challenges and how how do we sort of change the industry, how do we overcome some of those big challenges?
• 3:33
  SPEAKER_00: Uh, and that led me to the past two years where I sort of went, right, I'm going to build a business because I want to do something different, I want the industry to change, and I want to be part of that change.
• 3:42
  SPEAKER_00: Because there's no point in having these feelings and beliefs, and then just staying in a big product provider, getting a nice salary, why not step out and try and be a change maker?
• 3:51
  SPEAKER_00: So that was fundamentally what led me to create Pillar Client Services because I had all the problems.
• 3:55
  SPEAKER_00: I'd sat and listened to all the challenges, uh, and then it was a case of how do I build something that actually addresses some of the fundamental challenges that we face in financial services, and Pillar Client Services was born.
• 4:08
  SPEAKER_00: Fantastic.
• 4:08
  SPEAKER_01: So, what were some of the problems that were coming up the most then?
• 4:11
  SPEAKER_00: Yeah, I mean, look, it's never it it's always interesting when you carry out a body of research, you go in with these sort of preconceptions about what those challenges might be.
• 4:19
  SPEAKER_00: Um the reality was because I spent 20 odd years of my life in front of IFAs, I knew what a lot of those challenges already were.
• 4:25
  SPEAKER_00: But the point was going deeper into those challenges, so not just you know, we don't have enough time, we've got too many clients, regulation burden, you know, costs of running a business, staff challenges, recruitment, all all the things that I knew would be would be said, but actually drilling down into why are those a challenge and what does it mean for the business and how does it impact the business at a deeper level?
• 4:46
  SPEAKER_00: So it's all very well somebody saying to you, Brian, I want new advisors.
• 4:49
  SPEAKER_00: Do you know any good paraplanners and advisors that you can put my way in your travels?
• 4:55
  SPEAKER_00: But for what, what are you actually trying to solve under that?
• 4:57
  SPEAKER_00: What is that new advisor coming in to do, or what is that new paraplanner coming in to do?
• 5:01
  SPEAKER_00: And and that's what led me down the path of really looking in it.
• 5:04
  SPEAKER_00: The challenge is time fundamentally in most IFA businesses.
• 5:08
  SPEAKER_00: You know, the the demands that the the industry has put on advice has got bigger and bigger and greater and greater, the regulatory need is greater.
• 5:17
  SPEAKER_00: So for me, it was about making sure that advisors, um I guess pillar was the construction of pillar was about how do we free up time in the advisor business, and fundamentally how do we make sure that clients still get a very good level of service and they get value delivered to them, but the advisor can actually run a profitable business alongside that.
• 5:35
  SPEAKER_00: Uh, and actually the key thing at the back of that was trying to address some of the sort of advice gap challenges that we face as well as some of the recruitment challenges that we face in the industry as well.
• 5:45
  SPEAKER_00: Because as I was going around doing my research, you know, I saw the demographics of the industry, we all know the challenges there.
• 5:51
  SPEAKER_00: Um I I heard advisors saying to me, you know, I've been on a journey, I've been around for 10, 15, 20, 25 years.
• 5:59
  SPEAKER_00: At the start, my client journey, what my client intake was you know, I would take on anybody to actually know I'm having to turn clients away, I don't need new clients.
• 6:07
  SPEAKER_00: Um, and then the challenge that that faces they've got this huge book that actually can't necessarily be serviced in the way that it it it needs to be from a consumer duty perspective.
• 6:16
  SPEAKER_00: So, yeah, Pillar Client Services is about trying to address some of those challenges.
• 6:19
  SPEAKER_01: Okay, did you find a lot of the time it was feelings-based?
• 6:23
  SPEAKER_01: Like leaders within this be business were talking through feelings and perhaps not facts.
• 6:28
  SPEAKER_00: Yeah.
• 6:29
  SPEAKER_00: Gut, I I always called it gut.
• 6:31
  SPEAKER_00: Um because when I was drilling down and I was sort of saying, How do you know?
• 6:35
  SPEAKER_00: And they would say, Well, we're all busy, I can't get enough done operationally, we can't do more, everybody's at full tilt.
• 6:42
  SPEAKER_00: You know, they didn't really want to talk about inefficiencies within the business, they didn't want to look at the operational changes that could be made.
• 6:48
  SPEAKER_00: Generally, what I found was that advisors had a gut feeling that they couldn't take on more clients because everybody was at capacity, and they usually just throw money at that by recruiting or bringing in another tech solution that probably doesn't address the problem that they've got.
• 7:03
  SPEAKER_00: Um so yeah, so it was a very much a gut feeling thing, um, which is great because you know, go with your gut sometimes, but my my my whole um thesis, I guess, is based on we'll take that gut feeling, let's drill into it and let's find out actually what it's like at client level.
• 7:19
  SPEAKER_00: Okay.
• 7:19
  SPEAKER_00: What what is it within your business that operation operationally makes you inefficient, and then start looking at how we can change that up to make you more efficient?
• 7:27
  SPEAKER_00: How can we hand you back time?
• 7:29
  SPEAKER_00: Okay, and what do you want to do with that time once you get it?
• 7:32
  SPEAKER_00: Because we're all very good at creating more time, we we onboard new systems, we onboard AI, and then we get time back, and then we just fill that time with stuff that isn't profitable or it's more inefficient.
• 7:42
  SPEAKER_00: So actually, making sure that when we we hand that time back to advisory firms, how do we make sure that you're then utilising that and whatever that may be, whether that's for personal stuff to go out in your own life and see more family members or play more golf or go more holidays, or whether that's I want to grow the business to X because I'm trying to sell it in a number of years.
• 7:58
  SPEAKER_01: What would you say is the biggest problem that you believe advice firms have with their existing client books?
• 8:05
  SPEAKER_01: Let's look at that angle first, because I think that's a big area of your research showed you that that's a a big area that can be moved, right?
• 8:11
  SPEAKER_00: Massive, yeah.
• 8:12
  SPEAKER_00: Look, I think I think it comes as no surprise to most IFA principals that they have that understanding of who's good on their books, so they can they can rhyme off all their best clients, and but that's subjective.
• 8:24
  SPEAKER_00: What is what does best clients mean?
• 8:25
  SPEAKER_00: And again, through our research it was it would be AUM, you know, this client's got X amount with us, or this client pays that fee.
• 8:32
  SPEAKER_00: So when you just sort of calculated that through tangibly in your head, that meant they were a good client, they were above a threshold, they pay me more than two thousand pounds a year, that means they're good.
• 8:41
  SPEAKER_00: The reality was they'd no idea what profitable was from a client perspective.
• 8:45
  SPEAKER_00: They had an idea of the cost to run the business, so they would have a perspective of the business costs X to run, we've got so many clients, so divide that number of clients by the cost to run the business, and we have a number and how much money do we make, and then what's the profit in that and or what's the margin in that?
• 9:00
  SPEAKER_00: Um but actually that doesn't give you a true true reflection of what's underneath that because at client level every client has a different need, every client has a different you know the their perception of what value is from an advisor is very different, and actually the the delivery of value from the IFA changes client by client, um, and not just the IFA but the paraplanners, the admins, everybody that interacts with the business.
• 9:21
  SPEAKER_00: So I guess what we tried to do was really drill into that and sort of start looking at client by client level and saying, right, what does each client cost you to service specifically that client, not just an average number split across a whole book, but what's that client costing you?
• 9:34
  SPEAKER_00: And that's where pillar lens was, I guess, born.
• 9:36
  SPEAKER_01: No, tell us a little bit about pillar lens then.
• 9:39
  SPEAKER_00: Yeah.
• 9:39
  SPEAKER_00: Um so so I I I tried to fancy this up as much as possible when I was talking to IFAs about it.
• 9:46
  SPEAKER_00: Um, and uh a lovely IFA in Aberdeen of all places um sort of a cut through on my jargon and said basically it's like taking your car to a garage, you plug it in and it tells them everything that they need to know.
• 9:59
  SPEAKER_00: Um it tells them all the faults, all the problems, and I thought I wasted about four months trying to build that pitch deck and I could just have went with you went with your analogy.
• 10:08
  SPEAKER_00: So so but I think that analogy plays true because fundamentally what we do is we plug into your back office system through PowerLens, um, we diagnose your entire book, so everything that's on that, we drill into every single um piece of information that you've got on that client.
• 10:24
  SPEAKER_00: We the idea is that we hold a mirror up to you at client level, so we start to show you what each client takes to service.
• 10:31
  SPEAKER_00: So, what's the cost to service that client?
• 10:33
  SPEAKER_00: What's the interactions?
• 10:34
  SPEAKER_00: You know, how many emails do they get, how many phone calls do they make, how many meetings do they get, you know, what what do they get from a marketing perspective, uh uh and then from a sort of a review perspective, what are you actually delivering to them?
• 10:46
  SPEAKER_00: And then looking at things like what is that client and how up to date is that client, and is there challenges there in your data, and can we help you clean that data?
• 10:54
  SPEAKER_00: And then we present you back this sort of a full diagnostic um what's in all board report and Excel spreadsheet that says, look, here's some of the challenges in your business.
• 11:04
  SPEAKER_00: So and and at the base principle, it's your business you know has 400 clients, it has£1.4 million of revenue, and you've got£200 million under management, you know, that that's great, but what does that mean?
• 11:16
  SPEAKER_00: And then we take it to the next level that says, What does each client bring in terms of profitability and how profitable are they?
• 11:21
  SPEAKER_00: What's the cost of service?
• 11:23
  SPEAKER_00: And then being able to play that back to the advisor and say, Well, here's what individually each of your clients cost you per year, and then you can see whether they're above or below that line that they should be.
• 11:33
  SPEAKER_00: Um, so you can actually start to see a client-by-client level whether they're profitable or not.
• 11:37
  SPEAKER_00: And the biggest surprise for most advisors is that there's always clients in there that shock them, that they think are profitable because they've got a certain number in their head, and actually, when you drill down to what they take from you or what they need to service them or the cost to service them, is far higher.
• 11:51
  SPEAKER_00: Um, so you can start to see straight away that sort of a book breaking up into the segments what's profitable, what's not, and then you can start thinking about what do you want to do with that.
• 11:59
  SPEAKER_01: Yeah, you you you had a white paper, you kindly sent it to me.
• 12:02
  SPEAKER_01: Um and your research suggested that between 44% to 72% of the average advice book costs more to serve than it generates.
• 12:13
  SPEAKER_01: Yeah.
• 12:13
  SPEAKER_01: So why is that happening?
• 12:15
  SPEAKER_00: Yeah, I look I I think I again when I spoke to IFAs first about this, I think a lot of IFAs have a perception of what their book's like.
• 12:28
  SPEAKER_00: Um but there's recency bias in that as well, isn't there?
• 12:31
  SPEAKER_00: So they just think about what they're doing in the past month, three months, six months, a year, and and and naturally you forget about the whole journey that you've been on, you forget about the book that you've built over a period of time.
• 12:41
  SPEAKER_00: Um so it's so it's easy to focus in on what you've done in the past three months to think, yeah, really profitable look at all the new business I'm writing, look at the revenue that comes in from these clients, so look at the reviews that we're doing.
• 12:50
  SPEAKER_00: Um, but when you actually do the diagnostic, when you actually really drill into it and you see that sort of profitability number, and that was based on about 150 firms that we looked at.
• 12:58
  SPEAKER_00: Um, that number between 44 and 72% were unprofitable, and that's at client level, so that's just drilling right down to the cost to serve those individual clients.
• 13:07
  SPEAKER_00: Now there's a natural um I guess reaction for advisors that they'll say, but that's not the case because that client's the nephew of my wealthiest client, and that's somebody who gives me loads of leads and connections, so they're really profitable, just not in the face of it, and or they pay me an ad hoc fee, but that's fine.
• 13:24
  SPEAKER_00: But fundamentally, when you strip away those individual cases, you're left with a big number.
• 13:28
  SPEAKER_00: Um, and what you normally got is this cross-subsidisation going on in your book where there's a cohort of clients, let's say in a book of 400, there's a hundred clients that are paying you the you know roughly sort of 70 to 80 percent of your revenue pareto principle.
• 13:41
  SPEAKER_00: You know, everybody knows it.
• 13:42
  SPEAKER_00: That plays out true very much in the books that we diagnose.
• 13:45
  SPEAKER_00: Um, and that that's the sort of troubling point when you hold that mirror up and you say, look at these clients who you think are profitable, aren't you?
• 13:51
  SPEAKER_00: You know there's some that aren't because you'll know there's some that are paying you 400-500 pounds a year.
• 13:55
  SPEAKER_00: Um, and again, that there's a lot of great advisors out there who have got this sort of a um moral um aspect of what they do, and they want to be able to deliver good advice to everybody, and they can't just want to disengage with somebody because that's not nice and it's not fair, it's not a nice letter to send out to somebody that's maybe been your client for a long time that you can't service you anymore, or you need to pay us more money.
• 14:15
  SPEAKER_00: So the reality is clients' advisors know that there's that rump at tail or whatever you want to call it within the book that probably isn't profitable, and collectively that's a big number.
• 14:24
  SPEAKER_00: So individually they don't seem like big numbers, but you don't write off a book.
• 14:28
  SPEAKER_00: And one of the most compelling conversations that I had was an advisor who said to me, Brian, I've got 300 or so clients that I'm potentially just going to disengage because I can't service them anymore.
• 14:38
  SPEAKER_00: Big business, you know, 300 clients.
• 14:40
  SPEAKER_00: Um I think the overall book was about two and a half thousand clients.
• 14:43
  SPEAKER_00: But that's a big number, you know, a huge number.
• 14:45
  SPEAKER_00: And the IFA was like, I just don't know what to do because I don't want to disengage.
• 14:49
  SPEAKER_00: I I don't believe robo advice was the solution to that problem.
• 14:53
  SPEAKER_00: Um and you know, ultimately Pillar Lens was borne out of that.
• 14:56
  SPEAKER_00: Um Pillar Client Services was borne out of that because we were saying, right, well, there's a big challenge.
• 15:01
  SPEAKER_00: How if we can build something that can come in and help you service those clients profitably, hand you back the time that it takes to look after those clients, then ultimately you're going to probably have you know better profitable clients coming in your door.
• 15:14
  SPEAKER_00: You can start doing more with the better the the more profitable clients.
• 15:18
  SPEAKER_00: And and really, one of the really interesting things, and I come up with a crappy analogy again, like the car diagnostic was I saw this in a film many years ago that was every IFA holds a glass of water out.
• 15:28
  SPEAKER_00: You know, if you think of your client book as a glass of water, um and whether that glass of water's half empty or or just a little bit empty, you know, after an hour it's not heavy, after two hours it is, after three weeks it's heavy, four hours, five or four months, five months, and that's effectively those clients.
• 15:42
  SPEAKER_00: You're holding that book for a very long time, holding that glass, eventually it gets very, very heavy, and it's going you're going to drop the ball on it, and that's what we saw.
• 15:48
  SPEAKER_00: So when we diagnosed these books, we started to see that there's a cohort of clients that just weren't getting the value.
• 15:54
  SPEAKER_00: Which creates fatigue for the business.
• 15:56
  SPEAKER_01: Yeah, massive fatigue.
• 15:58
  SPEAKER_01: Okay, right.
• 15:58
  SPEAKER_01: I want to go back because it's a simple thing that every financial planning firm should be doing is using your proprietary tech.
• 16:05
  SPEAKER_01: It's your tech, right?
• 16:06
  SPEAKER_00: Yep.
• 16:07
  SPEAKER_00: Yeah?
• 16:07
  SPEAKER_01: Pillar lens.
• 16:09
  SPEAKER_01: They plug it into their back office system, they can run a diagnostic, and you can tell them how profitable their clients are.
• 16:15
  SPEAKER_00: Yeah.
• 16:15
  SPEAKER_01: And the average you say at the moment is between 44 and 72% of the average book, costs more to serve than it generates.
• 16:22
  SPEAKER_01: Yeah.
• 16:22
  SPEAKER_00: And that's across a real cross-section of advice firms.
• 16:25
  SPEAKER_00: So that's not just all one-man bands or small IFAs, that's up to sort of a multi-RI firms, you know, 20, 30 IFA um type type firms as well.
• 16:34
  SPEAKER_00: So we've got a huge sort of a source of data to call on there.
• 16:36
  SPEAKER_00: And that that's the really compelling thing that this isn't just specific to you know a cohort of IFAs or a particular segment of IFAs in the market.
• 16:45
  SPEAKER_00: This is this is an endemic problem that runs across the entire industry.
• 16:49
  SPEAKER_01: Of which you covered in your white paper.
• 16:50
  SPEAKER_01: Yeah, yeah, that's in the white paper.
• 16:51
  SPEAKER_01: So, first of all, I would say to anybody listening to this right now, download that white paper.
• 16:54
  SPEAKER_01: Look at that research.
• 16:56
  SPEAKER_01: Um, let's just go back onto that diagnostics tool.
• 16:58
  SPEAKER_01: I just want to understand how simple it is for somebody to use, right?
• 17:01
  SPEAKER_01: Because I think it's such a powerful exercise, this.
• 17:03
  SPEAKER_01: It's not something I've really come across.
• 17:05
  SPEAKER_01: So there isn't a you know lots of people like you out there doing this, right?
• 17:09
  SPEAKER_00: It's not yeah, there's no like for like product in the marketplace.
• 17:12
  SPEAKER_01: Okay, so we have something unique, it's going to add value, it's going to free up time, which gives the build business freedom to be creative and grow.
• 17:20
  SPEAKER_01: Yep.
• 17:20
  SPEAKER_01: But what do they do with those clients, right?
• 17:22
  SPEAKER_01: That's the that's the bit we're going to come on to in a minute.
• 17:24
  SPEAKER_01: So just talk me through that pillar lens then.
• 17:26
  SPEAKER_01: So it plugs into the back office system.
• 17:28
  SPEAKER_01: Do you run it for them?
• 17:29
  SPEAKER_01: Do they run it?
• 17:30
  SPEAKER_01: How quickly can they get the results?
• 17:32
  SPEAKER_00: Yeah, no, uh, in effect, if we take Intelliflow as a back office system, you know, sort of a largest one in the marketplace, we plug into all of them.
• 17:39
  SPEAKER_00: Um but if we take Intelliflow as an example, you go into their store, you download our app within the Intelliflow store.
• 17:46
  SPEAKER_00: Um, that then gives us the API connection.
• 17:48
  SPEAKER_00: We're then connected, or our tech effectively then starts diagnosing your book, it then gives us the output from that um into our system, and then we run what we need to do from a sort of a you know human lens over that and build the report that you get back.
• 18:02
  SPEAKER_00: But you're looking at probably three days from plugging in to actually getting that full report.
• 18:06
  SPEAKER_00: Um it's fairly fairly straightforward and fast.
• 18:09
  SPEAKER_00: Um and and and it's comprehensive.
• 18:11
  SPEAKER_00: You're looking at a sort of an eight, nine-page board report um that goes into the sort of a headlines and gives you all the sort of a key metrics that you can sit down in your business, whether you're a one-man band, two, five, ten, fifteen or whatever.
• 18:21
  SPEAKER_00: You've got an exec committee, you can start going right.
• 18:24
  SPEAKER_00: Here's the challenges that we face in this book.
• 18:26
  SPEAKER_00: It gives you sort of a tangible action, you know, here's what to do now.
• 18:29
  SPEAKER_00: It gives you some sort of a pain points.
• 18:31
  SPEAKER_00: It's you know, these should be things that you should be concerned about from a regulatory perspective, consumer duty perspective, because it starts to look at what's what's not there in the back book.
• 18:39
  SPEAKER_00: And a lot of the times that that's just creates little projects for you within the business.
• 18:43
  SPEAKER_00: You know, let's go out and make sure that we've got a vulnerability status for everybody who might be vulnerable.
• 18:47
  SPEAKER_00: So our tech will identify clients that potentially should could be vulnerable based on the interactions that you've got with them, based on their demographic, and actually we can't find anything that says they've been asked that question within the sort of a review process previously.
• 19:01
  SPEAKER_00: So you know, fill these gaps, so take these little projects.
• 19:04
  SPEAKER_00: So and a great example when we've we diagnosed one of the books, there were 45 clients who had about 9.5 million pounds of fees, but zero fee been it's nine and a half million pounds of assets, but zero fees been paid on it.
• 19:15
  SPEAKER_00: Now, again, that's that that firm said to me, Look, that's an anomaly, that's just we've not updated the system, right?
• 19:20
  SPEAKER_00: Now that's fine, but make sure that system is updated because that's not reconciling, right?
• 19:23
  SPEAKER_00: And there's tools out there that can help you do that as well.
• 19:26
  SPEAKER_00: You know, so it gives you these sort of a projects, and ultimately when it comes to the back end, is that it says, right, you've got three choices.
• 19:31
  SPEAKER_00: You've got this book, there's a part of it that's unprofitable, there's a part of it that's kind of a marginal, and there's a part of it that's profitable.
• 19:37
  SPEAKER_00: So you want ultimately your revenue generators in the business pointed outwards to the profitable clients.
• 19:42
  SPEAKER_00: Um, you want to take those marginal clients up as well as if you possibly can in the profitable sense, but you need to address the challenge at the sort of a sub-threshold, the unprofitable client book.
• 19:51
  SPEAKER_00: And you're faced with uh for me, it's sort of a quite binary.
• 19:54
  SPEAKER_00: You've got three choices effectively.
• 19:56
  SPEAKER_00: You can either cut them off altogether, you can do the sort of dear john letters I I always say, you can't service you anymore.
• 20:02
  SPEAKER_00: You know, if you need us, we're still here, but actually, you know, the business is here now, and and you know, you our minimum is whatever£1,500.
• 20:09
  SPEAKER_00: You can reprice them.
• 20:11
  SPEAKER_00: So you can you can ask them to pay more for you, but that's an awkward conversation as well.
• 20:14
  SPEAKER_00: And and in a lot of cases, the the sort of a sub-threshold clients are uncomplicated, and you could be asking them to pay a high percentage of their overall assets, you know, it could be up two or three percent almost in some cases to get to the sort of a minimum threshold, or you know, you come up with a a sort of solution, which is where pillar client services comes in, which is you know a business that comes in under your brand in your book, under your back office system, and and services those clients more profitable for you.
• 20:39
  SPEAKER_00: Fantastic.
• 20:40
  SPEAKER_01: Before we get onto pillar client services, because this is super interesting as well, solving a problem.
• 20:44
  SPEAKER_01: Um, what's the reaction usually when you do that lens?
• 20:48
  SPEAKER_00: Um it's it's been really mixed.
• 20:50
  SPEAKER_00: You get depending on the sort of a individual like IFAs are are are usually quite blunt and frank and honest people, but none of us really like getting a mirror held up to us.
• 20:59
  SPEAKER_00: You know, we all have that.
• 21:00
  SPEAKER_00: I mean, when I woke up at four o'clock this morning, you sort of are looking in the mirror, I go, Wow, that's that's me, 46, Jesus.
• 21:05
  SPEAKER_00: Um, and it's the same when somebody holds it holds a mirror up to your business, because again, you just you sort of you don't bury down some of the challenges, but you focus on what's happen what's working well because the day-to-day challenges uh what owning a business or running a business are are vast, so it's hard to focus in on some of the problems, and what we're effectively doing is doing that for them, so you get the natural reaction of oh that can't be right, that's not my business, you know, or that's a bit high, I didn't expect that, or that's not true.
• 21:33
  SPEAKER_00: So you get this whole gambit of emotions, but then what we actually do is we show them the data, so we the the you know the the the data comes in an Excel spreadsheet that they can look at and download themselves off their their dashboard, and it'll it'll drill in and show them all those gaps, and it will show them the problems, and it will show them that we've not made it up.
• 21:49
  SPEAKER_00: Um, it'll show them how we come to that cost to service each client, what the profitability is or lack of profitability and why.
• 21:55
  SPEAKER_00: Um and when you start to work through the board report, that's because that's part of what we do.
• 22:00
  SPEAKER_00: We work through the board report with them and sort of give them the sort of a key points and metrics and you know tell them how we can work with them.
• 22:06
  SPEAKER_00: Um they then start to sort of uh it's that sort of a you know that journey that's sort of a denial and the understanding, and it's a bit like right, okay, I get it.
• 22:13
  SPEAKER_00: How what do we do to fix this?
• 22:15
  SPEAKER_00: Gotcha.
• 22:16
  SPEAKER_00: And and that's where we are, you know, that's that that's the what's where we want to get people on the journey because fundamentally that's what it's all about.
• 22:21
  SPEAKER_00: At the core of this, I I I came at this from a principle of there's a lot of people out there who need financial advice, who are paying for financial advice, probably not maybe necessarily getting the best level of service for it, don't want to bother anybody or burden anybody, so they carry on.
• 22:35
  SPEAKER_00: The regulators came along with consumer duty um and saying, right, you need to provide value, you know, make sure you're delivering value, and all the other things that go with that.
• 22:42
  SPEAKER_00: Um and IFAs are caught in this quandary of well, I've got too many clients, I can't service them all, I can't give them all value, and then value is in the eye of the beholder as well.
• 22:51
  SPEAKER_00: So, what does that mean?
• 22:52
  SPEAKER_00: How how do I deliver value that somebody can then say it's not?
• 22:55
  SPEAKER_00: Um so we we then we then sort of uh have to get to that point where we say, right, let's come up with a a solution to the challenges within your business.
• 23:03
  SPEAKER_00: Um and and and that could be a sort of a dramatic, yeah, I'm going to cut these clients off, or it can be let's try and come up with another solution.
• 23:09
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• 24:06
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• 24:12
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• 24:13
  SPEAKER_01: So what we're looking at here is a single source of truth, right?
• 24:15
  SPEAKER_01: We're cutting through the noise, the guesswork, the emotion, the gut, the connection with the the friendship price.
• 24:21
  SPEAKER_01: Yeah, yeah, absolutely.
• 24:22
  SPEAKER_01: Right?
• 24:22
  SPEAKER_01: And we're looking at it straight in and saying, look, this is how much time is taking up in your business.
• 24:28
  SPEAKER_01: Yeah.
• 24:28
  SPEAKER_01: Imagine if you removed that segment of client.
• 24:32
  SPEAKER_00: Yeah.
• 24:33
  SPEAKER_01: But I don't want to remove them because they're my friends.
• 24:35
  SPEAKER_00: Yeah.
• 24:35
  SPEAKER_00: Yeah.
• 24:36
  SPEAKER_01: That's what happens a lot, isn't it?
• 24:37
  SPEAKER_01: Yeah.
• 24:37
  SPEAKER_01: They become friends, especially the older advisors.
• 24:39
  unknown: Okay.
• 24:40
  SPEAKER_00: You've been on a journey with these clients, haven't you?
• 24:41
  SPEAKER_00: You go through that life gambit with a lot of clients, don't you?
• 24:44
  SPEAKER_01: A sense of responsibility.
• 24:45
  SPEAKER_01: Yeah.
• 24:45
  SPEAKER_01: And that's difficult.
• 24:46
  SPEAKER_01: Difficult to break.
• 24:47
  SPEAKER_01: So what did you come up with?
• 24:49
  SPEAKER_01: Pillar client services?
• 24:50
  SPEAKER_00: Yeah, pillar client services.
• 24:51
  SPEAKER_00: So yeah, and again in our research, that was very much the case.
• 24:54
  SPEAKER_00: We don't want to disengage Bright.
• 24:56
  SPEAKER_00: We don't want to disengage these clients.
• 24:58
  SPEAKER_00: We don't want to deliver you know a sort of a robotic AI-led service to them.
• 25:02
  SPEAKER_00: We we these people still need human interaction, they still want and demand.
• 25:06
  SPEAKER_00: And if we think about the demographic, you know, that's that's where they're very much focused.
• 25:10
  SPEAKER_00: So so when we sat down and we constructed Pillar Client Services about how can we take that burden away from you, how can we take that workload away from you?
• 25:17
  SPEAKER_00: But to the client, the end client, for all intents and purposes, they don't see any change.
• 25:22
  SPEAKER_00: So all they see is that XYZ IFA firm is still delivering the financial planning needs, um, but it's delivered by Pillar Client Services.
• 25:31
  SPEAKER_00: So we come into your company under your brand in your back office system after we've identified those unprofitable or subthreshold clients, um, and then we carry out the review end-to-end for you.
• 25:43
  SPEAKER_00: So we do the pre-review, the actual review, and the post-review output, whatever that may be.
• 25:48
  SPEAKER_00: And within that process, we've got a very strict guard rules in place because we're non-advice, so we don't give regulated advice.
• 25:54
  SPEAKER_00: If there's an advice need, we escalate that back straight away to the advisor within 24 hours.
• 25:59
  SPEAKER_00: We then report on a monthly basis to make sure they're they're on top of that.
• 26:03
  SPEAKER_00: Um we carry out the review, um, we make sure that all the sort of a data is cleansed and up to date, so all those gaps that we've identified and and the diagnostic, um, we make sure that we fill those gaps in for them.
• 26:14
  SPEAKER_00: So the vulnerabilities and you know whatever it may be, the income needs or the the income uh expenditure, all this all the stuff that the gaps that usually um present themselves.
• 26:23
  SPEAKER_00: And then we we sort of carry out the review, we work within the IFA's framework, we can clean it up as much as as much as the IFA wants us to.
• 26:30
  SPEAKER_00: Um and the the reality is that about 80 to 85% don't really need anything.
• 26:35
  SPEAKER_00: Okay.
• 26:35
  SPEAKER_00: Um, because they're uncomplicated clients.
• 26:38
  SPEAKER_00: Um, they have one product, one, you know, they're there may be ISA or ISA pension, or you know, um just by default of them being you know uh unprofitable clients tend not to have complex needs.
• 26:49
  SPEAKER_00: So a lot of them it's just kind of a business as usual carry on.
• 26:52
  SPEAKER_00: But if we identify an escalation, then that goes straight back to the advisor.
• 26:56
  SPEAKER_00: And the really interesting thing, the first the the pilot firm we worked us on within the first with the actually, I mean we'd done 200 clients, but within the first 20 we'd identified£55,000 worth of escalations.
• 27:07
  SPEAKER_00: So in effect, um the escalations paid for pillar client services pretty much.
• 27:11
  SPEAKER_00: But look, we know that wasn't we knew that was never going to continue, it was just a nice start to the journey.
• 27:16
  SPEAKER_00: Um but ultimately that's part of what we do.
• 27:18
  SPEAKER_00: We try and look in and we try and diagnose those clients fundamentally, we categorize them, we look at their complexity, then we try and deliver a review commensurate with their complexity that makes sure that we meet all the needs, we clean up the back office system, we we make sure from a consumer duty perspective you've got this sort of clean bill of health.
• 27:33
  SPEAKER_00: Um, and at the back end of it, you've got a client who's fundamentally saw value.
• 27:37
  SPEAKER_00: And the really interesting point is that they've not seen anything different, it's just a new level of service within the current IFA firm.
• 27:43
  SPEAKER_00: And one of the interesting points that came out really early doors was that IFA's egos came to the fore where my client wants to see me.
• 27:50
  SPEAKER_00: Um but then we we always go back to the diagnostic and we say, Well, the reality is a lot of these clients weren't seeing you, they've not seen you for a number of years, you know, they've they've had interaction with you and they've you know, and they've maybe made a phone call or a letter, or they've had interaction with the office.
• 28:04
  SPEAKER_00: But the reality is there's a lot of reviews here that haven't been delivered over a number of years, um, so they're probably getting more now in terms of value.
• 28:11
  SPEAKER_00: So if somebody comes a calling and says, Do you get value from your financial advisor?
• 28:15
  SPEAKER_00: Let's say one of the claims companies comes a calling and says, Are you getting value for what you pay your financial advisor?
• 28:21
  SPEAKER_00: Um, you want your client to be able to turn around and say, Yes, they absolutely do.
• 28:24
  SPEAKER_00: I get an annual review or whatever every 18 months, uh you know we have a teams call and we sit down and we go through a very comprehensive review and make sure that I'm all okay, anything changed, you know, any circumstances changed, has anything evolved, or are we still on the right path?
• 28:38
  SPEAKER_00: And you know, at the end of that, I always come away feeling reassured in the path that we're on, um, and that's great.
• 28:44
  SPEAKER_00: So the you you've not got to run on claims in your firm there as well.
• 28:47
  SPEAKER_00: So from a PI perspective, that's a positive as well.
• 28:49
  SPEAKER_01: Love it.
• 28:50
  SPEAKER_01: Okay, so we're talking about this being like almost white labeled, yeah?
• 28:53
  SPEAKER_01: So you're you're a white label service, you're dealing with the segment of clients that you've identified through Lens that are no longer profitable and taking up too much time, therefore stifling the growth of the business, the freedom of the business, the creativity of the business.
• 29:06
  SPEAKER_01: You're looking after that from a client perspective, the client doesn't see any different.
• 29:10
  SPEAKER_01: Do they have to sign anything else or do they have to is there any indication at all that it's a third party?
• 29:15
  SPEAKER_00: So it's again it's it's very firm specific.
• 29:17
  SPEAKER_00: So some firms have various different service and agreements in place with their clients already.
• 29:21
  SPEAKER_00: You know, um, what we've done is we've constructed what Pillar Client Services is.
• 29:26
  SPEAKER_00: So there's a client agreement there that can be sort of a built into the current existing client agreement, and you can get the client to sign that because this is the new level of service that they're going to get ongoing, and Pillar Client Services will deliver that, but to the eye to the end client, it's just whoever IFA firm that's delivering that level of um that level of service to them.
• 29:43
  SPEAKER_00: So we can do that, um, or IFAs can build their own if they've not already got it.
• 29:47
  SPEAKER_00: Some of them do have different segments, they just need the wording changed a little bit.
• 29:51
  SPEAKER_00: Um, and the reality is the uptake in this has been fantastic from a client perspective.
• 29:55
  SPEAKER_00: No clients disengage with us whatsoever.
• 29:57
  SPEAKER_00: Um, no clients went, I don't want this level of service, everybody's really happy with it.
• 30:00
  SPEAKER_00: Um, and in fact, I think the satisfaction is that the clients are actually getting more than what they previously got.
• 30:06
  SPEAKER_01: Yeah, that all of a sudden there's that extra service that's coming in, that extra touch point which might uncover and discover some new opportunities but might also generate referrals.
• 30:16
  SPEAKER_00: Yeah, absolutely.
• 30:16
  SPEAKER_00: Yeah, yeah, because it's what good advice it's not it's not that IFEs don't want to deliver good advice, it's just it's difficult to do that for a big bunch of clients when you you know you've got so many pressures on.
• 30:25
  SPEAKER_00: And every IFE tells me a different number, Brian.
• 30:27
  SPEAKER_00: I can look after 150, some will say 250.
• 30:30
  SPEAKER_00: But the reality is there's far more clients than there is financial advisors, and we need solutions to that problem.
• 30:34
  SPEAKER_00: And that solution is never going to be robo advice in the short term, not with this demographic.
• 30:38
  SPEAKER_00: You and I, young guns in our 40s, we might we might embrace robo advice at some point in the future.
• 30:43
  SPEAKER_00: But the the sort of a if you look at the wealth um of the the UK um uh IFA space, it's somewhere between 55 and 75.
• 30:51
  SPEAKER_00: Yeah, they still value whether you've got a hundred grand or a million pounds, that hundred grand of the million pounds is tangible to you and it's relative and it's subjective that that's a lot of money, and you still want somebody to tell you that everything's going to be okay.
• 31:04
  SPEAKER_00: You don't just want a computer telling you that.
• 31:05
  SPEAKER_00: Yeah, you want that human interaction, and that's what we deliver at Pillar Client Services, that human interaction, where there's somebody there who understands and knows what you're talking about, knows the questions and challenges that you might be facing, is able to identify the opportunities that you may have or the the the sort of obstacles that you may have currently in your life, and then at the end of it you go away feeling sort of comforted and happy that you're still on plan to whatever that money's for, whether it's to pass on to the future generations or or go more holidays.
• 31:31
  SPEAKER_01: Do the pillar client services team get trained by the financial advice business that you are um servicing?
• 31:39
  SPEAKER_01: Uh do they have any say in what they do?
• 31:42
  SPEAKER_01: Is it like branded stuff?
• 31:44
  SPEAKER_01: Yeah, yeah, yeah.
• 31:45
  SPEAKER_01: How much sort of interact and interaction?
• 31:48
  SPEAKER_01: Do they feel like they're just passing it over and see you later and that's it?
• 31:51
  SPEAKER_01: Or do they actually is there a nice handover?
• 31:53
  SPEAKER_00: Yeah, no, they're very much as we carry out a sort of seven-stage onboarding exercise um with every firm that we work with.
• 31:59
  SPEAKER_00: Uh, and that's everything from the sort of client agreement, you know, what does that look like, data protection, the sort of things that have to be done, um, and we have to put that in place from a sort of a legal perspective.
• 32:08
  SPEAKER_00: But then we go into what does a review look like in your business?
• 32:11
  SPEAKER_00: So we ask um if you know if it's what give us a sort of a perception of what the culture's like within the business and what is that review?
• 32:17
  SPEAKER_00: Because if if your review style is very relaxed and sort of a conversational, then we want to make sure that we deliver that, or is your review very sort of a fact-based and quite regimented and fact-findy, and we'll deliver it like that.
• 32:28
  SPEAKER_00: There's also things like the central investment proposition, where's your money invested?
• 32:32
  SPEAKER_00: So we need to be on board with what that looks like, being able to articulate that story to the to the client and what's going on in the market.
• 32:38
  SPEAKER_00: So we have a link there.
• 32:40
  SPEAKER_01: What about companies that are going out and acquiring?
• 32:45
  SPEAKER_01: How valuable is something like pillar lens to them?
• 32:48
  SPEAKER_00: Um I would love to say that when we've we launched this um this company that we we fundamentally targeted um uh sort of our consolidators.
• 32:58
  SPEAKER_00: The truth was we didn't.
• 32:59
  SPEAKER_00: Um we identified that it was a great opportunity because we gave buyers of books.
• 33:04
  SPEAKER_00: No matter whether you're one of the biggest or you're just a sort of a local IFE buying up smaller books, it's irrelevant, but it gives you this sort of a deep diagnostic of what you're buying.
• 33:12
  SPEAKER_00: Um so what it does is it takes the due diligence process down from let's say three months, six months down to a couple of weeks where you get that number in front of you where you see first first hand that you know the one million pounds of revenue or the£500,000 worth of profit at a client level.
• 33:28
  SPEAKER_00: What does that look like?
• 33:29
  SPEAKER_00: So is that 50 clients that are delivering all that profit, or is it 500 clients?
• 33:33
  SPEAKER_00: And of that 500 clients, what is that of the total book?
• 33:36
  SPEAKER_00: So, what am I buying here?
• 33:37
  SPEAKER_00: What are we really buying?
• 33:38
  SPEAKER_00: Um, and that's the challenge that the industry's face with the consolidators.
• 33:41
  SPEAKER_00: They buy these big books, they go around the country buying up businesses, and then they sort of go, right?
• 33:46
  SPEAKER_00: We've got all this, how do we service it now?
• 33:48
  SPEAKER_00: So we want we want to generate more profit, we want to get the revenue generators pointed outwards, right?
• 33:53
  SPEAKER_00: New, more profitable business.
• 33:54
  SPEAKER_00: But we've got these big books that still need to be looked after.
• 33:57
  SPEAKER_00: So the consolidators have gone, right, let's diagnose the book up front, which means we can give the bat uh the seller a true price of the book.
• 34:04
  SPEAKER_00: So none of this, it's eight times you know, six months down the line, it's eight times fifty percent because there's there's stuff in there that we don't want.
• 34:11
  SPEAKER_00: So it gets you that true number up front.
• 34:13
  SPEAKER_00: Um, and then by the time you come through that sort of a due diligence process, you kind of know what you're going to get at the back end of it.
• 34:19
  SPEAKER_00: Um, it also gives you a seller, as a seller of the business, an opportunity to say, right, if I want to sell my business in two years, what do you need to do to get it in prime shape?
• 34:27
  SPEAKER_00: So the diagnostic comes in and power client services comes in to work with you to actually get it in the best shape that it possibly can be to sell on.
• 34:34
  SPEAKER_00: And we know that because we're working with consolidators and and and sellers, you know.
• 34:38
  SPEAKER_01: So acquisition brokers, consolidators, uh businesses that are say taking on self-employed financial advisors as well.
• 34:45
  SPEAKER_01: What a great angle that is.
• 34:46
  SPEAKER_01: If you're taking on self-employed advisors, then you can quickly plug into their plug into their back office system, especially if they're self-employed when in their own business.
• 34:52
  SPEAKER_01: Yeah, absolutely.
• 34:53
  SPEAKER_01: What a great way to also help identify where you can save them time and money, right?
• 34:56
  SPEAKER_00: Yeah, yeah.
• 34:57
  SPEAKER_00: So I mean obviously the consolidators have all got their own processes in place, and you know, we're coming to market with something that's sort of a changing how they do things, so there's a natural sort of a right, how does this work in with what we are doing?
• 35:08
  SPEAKER_00: Um, but even on the face of it, it's giving you that sort of a real true client-by-client cost to service, you know.
• 35:16
  SPEAKER_00: So so it takes away the headlines of£1.2 million of revenue.
• 35:20
  SPEAKER_00: You know, what does that actually mean at a client level?
• 35:21
  SPEAKER_00: What are we really buying?
• 35:23
  SPEAKER_00: Are we buying 50 good clients?
• 35:24
  SPEAKER_00: Are we buying 500 good clients?
• 35:26
  SPEAKER_00: And that's the bit that really matters.
• 35:27
  SPEAKER_00: Um so it it it it it just takes that whole due diligence process away because you don't then go down the journey and go, Oh, well, I'm not going to sell you anymore because it's not worth my time.
• 35:35
  SPEAKER_00: I may as well try and tidy it up and sell you in two years.
• 35:37
  SPEAKER_00: Yeah.
• 35:37
  SPEAKER_00: It just cuts all that out because you kind of know straight away from the buyer and seller's perspective what the book's truly worth.
• 35:43
  SPEAKER_01: Okay.
• 35:43
  SPEAKER_01: With pillar client services then.
• 35:45
  SPEAKER_01: So how how so interested actually, how do you how do you make money personally?
• 35:50
  SPEAKER_01: And and you know, and and does the On the weekends or are you talking about uh And does the existing company that then use Pillar Client Services do they still receive a percentage of fee or anything like that?
• 35:59
  SPEAKER_01: How does that work?
• 36:00
  SPEAKER_00: Great question.
• 36:00
  SPEAKER_00: So so we we effectively just bill um the IFA firm um for each client review that we do.
• 36:06
  SPEAKER_00: Um so it's a flat fee for that process, uh for that um service.
• 36:09
  SPEAKER_00: So in effect, if you're getting£1,000 um per client, um, is there an annual review?
• 36:14
  SPEAKER_00: Uh is their ongoing fee that they pay you, um we will take£450 of that.
• 36:19
  SPEAKER_00: Um so we would just bill you, you identify a hundred clients that you want us to work with, and we we we we bill you for£45,000 after we carry out those reviews.
• 36:27
  SPEAKER_00: Gotcha.
• 36:28
  SPEAKER_00: Um so that's how we get paid.
• 36:30
  SPEAKER_00: Okay.
• 36:30
  SPEAKER_00: And Pillar Lens is slightly different, Pillar Lens is a diagnostic, so you can either pay for that as a standalone product where you can come along, you get a one-off diagnostic up front that says here's your business, what's and all, or you can have this sort of an ongoing monthly dashboard, so you get 12 refreshes of that that sort of shows you how the journey's progressing, it gives you a sort of consumer duty update.
• 36:49
  SPEAKER_00: And the idea is that as you're working with us in Pillar Client Services, you get to see how that journey progresses.
• 36:53
  SPEAKER_01: Which becomes like a consistent again, um especially if you're a very large business.
• 36:57
  SPEAKER_01: You know, I deal with the likes of Titan Wealth that you're growing really, really quickly.
• 37:00
  SPEAKER_01: Thousands and thousands and thousands of clients.
• 37:02
  SPEAKER_01: So the more you on board clients, what is you really need to know that data as it comes in.
• 37:05
  SPEAKER_01: Very quickly, and also the boarder one are gonna know it.
• 37:07
  SPEAKER_01: If you're PE backed, they're gonna know what wanna know what's going on.
• 37:10
  SPEAKER_01: So the cleaner the data you're providing them, the better.
• 37:12
  SPEAKER_01: Yeah.
• 37:13
  SPEAKER_01: The more people are gonna want to work with you, the more people trust you.
• 37:16
  SPEAKER_01: So then you grow hopefully quicker because you're freeing up the time.
• 37:19
  SPEAKER_00: Well that's it.
• 37:19
  SPEAKER_00: That's the point, isn't it?
• 37:20
  SPEAKER_00: Yeah.
• 37:21
  SPEAKER_00: I I mean I keep using that phrase, you point the revenue generators to where you want them to be.
• 37:24
  SPEAKER_00: Yeah.
• 37:25
  SPEAKER_00: Um, and you get that bit of the book that you know is is it still needs to be looked after because collectively, and how you know it's the bigger and bigger business you get, that tail gets bigger and bigger and bigger, and you're not going to write off that because it could be, you know, in an average IFA firm it could be a hundred grand that tail, but it in your bigger firms it could be millions and millions, you know.
• 37:42
  SPEAKER_00: So you're definitely not writing that off.
• 37:44
  SPEAKER_00: What you want is a solution for it.
• 37:45
  SPEAKER_00: Yeah.
• 37:45
  SPEAKER_00: And pillar client services is basically saying we can come in and work with you under your brand, under your system, under your processes, and the clients will get a good level of service, and you're effectively freeing up all that time within the business.
• 37:55
  SPEAKER_00: So the pre-review, the actual review, and the post-review is completely done.
• 37:59
  SPEAKER_00: It varies from firm to firm, but we've sort of worked out that it's about 3.4 hours per review that we do.
• 38:05
  SPEAKER_00: So if you think 100 reviews, that's you know 340 hours we hand you back to the business.
• 38:10
  SPEAKER_00: Um, and you know, one firm we're working with, the guy wants to play more golf, which is great.
• 38:14
  SPEAKER_00: You know, he's coming on in retirement, he just wants to get his book in shape for selling it on and and and do more, um, enjoying himself.
• 38:21
  SPEAKER_00: Um, and then we've got b businesses that we're working with that are saying, No, I want to we want we want our four advisors pointed in the right direction because that bit's taking up far too much of our time, not just the advisor but the paraplanner and the admin because of the interaction that it takes to actually get a review done.
• 38:34
  SPEAKER_01: I think about what you can do with that time.
• 38:35
  SPEAKER_01: You could retrain the advisors, yeah.
• 38:37
  SPEAKER_01: Yeah, you could bring in some really good learning and development.
• 38:40
  SPEAKER_01: We had Big Rock on recently talking about the soft skills, uh practical skills, all the behavioural stuff.
• 38:45
  SPEAKER_01: Yeah, yeah.
• 38:45
  SPEAKER_01: That is gonna be super important when AI starts to take away all these things you can kind of hide behind.
• 38:49
  SPEAKER_01: Yeah, yeah.
• 38:50
  SPEAKER_01: Um but what it also does is it challenges the existing advisors that you have in the firm.
• 38:54
  SPEAKER_01: It's a bit like Gollum, isn't it?
• 38:55
  SPEAKER_01: It's like, oh, I've got a client, my precious, I'm gonna hold on to that one.
• 38:58
  SPEAKER_01: But when you can actually show them a physically look, you you you have this many clients within your book that are not adding any more value, but let's remove those, let's focus your attention on getting those higher value clients and let's get your income levels up and let's get you working on the things that are also super interesting as well.
• 39:16
  SPEAKER_01: Because I think subconsciously you know they're not making you any money, yeah.
• 39:21
  SPEAKER_01: But the problem well you consciously you know, but subconsciously you feel it, yeah, and you can't quite work it out, but you it that sort of thing can build up as making you a little bit angry, yeah.
• 39:30
  SPEAKER_01: It can make you kind of stressed because you know, but you have this kind of fear of letting go of them because you feel like you can't because it took so long to get your client.
• 39:38
  SPEAKER_01: So there's probably this point where like businesses are growing, growing, growing, growing, growing, and they've got loads of them in there, but then you've also got the new advisors that are coming through, and it's kind of like a clean, quick way of segmenting, but still keeping some level of income and still having them within your business.
• 39:50
  SPEAKER_01: Yeah, so that's quite a nice thing.
• 39:52
  SPEAKER_00: I think that you make a great point there, so because I I mean I I I don't know if my feelings um people like how I think about this, but I genuinely think you want in an IFA business, you want everybody to be outward-facing, you want everybody to be client-faced, and if you know, and over the next five years, a lot of the administrative burden will be taken off of the human um so the humans' values in the the interaction.
• 40:14
  SPEAKER_00: Um so the parapartes and admins want to be facing out.
• 40:17
  SPEAKER_00: So your point around how do you retrain you know that business to be outwardly facing and deliver that you know really important part because that's the bit that people see, you know.
• 40:26
  SPEAKER_00: Uh we can all talk, and advisors do tell me that they'll try and explain to their clients about what goes on behind the scenes, what you know, it's pull the curtain back and show them what goes on.
• 40:34
  SPEAKER_00: But the reality is all they see is what they you get from so the meeting that you have, that one-hour meeting or whatever it may be, or the email interaction, that's the only bit that's tangible necessarily to the end consumer.
• 40:45
  SPEAKER_00: So, actually, if you can deliver more of that across the entire business and everybody in that business is delivering tangible value outward, that's just great, you know.
• 40:52
  SPEAKER_00: And then you can do more of that because you can take on more clients, you know, you can have admin paraplace, whatever the future roles will be called, client service managers, whatever they are, will be really tangible to the consumer because they'll feel the value that they're getting then, as opposed to going, I don't know if I get value.
• 41:07
  SPEAKER_00: So if I'm driving the car and it's on the radio, you know, are you getting value from your financial advice firm?
• 41:11
  SPEAKER_00: How much do you pay them a year?
• 41:14
  SPEAKER_00: There'll be a lot of people sitting out there, and I know because we've done the diagnostic, is there'll be a lot of clients going, I don't think I do, you know.
• 41:19
  SPEAKER_00: I'm paying a thousand pounds a year.
• 41:22
  SPEAKER_00: When was the last time I know they send me that email out every so often and I don't really know?
• 41:28
  SPEAKER_00: I'll maybe give that number a call, you know, and before you know it, you've got a claim coming in at your IFA firm saying you've not gave this client value over the five years, you owe them their fees back plus interest.
• 41:37
  SPEAKER_00: And guess what?
• 41:38
  SPEAKER_00: It doesn't take too many of them before you get a real run on your business.
• 41:41
  SPEAKER_00: Yeah, and that's a big PI concern then as well.
• 41:43
  SPEAKER_00: And never mind all the other complications that come with that.
• 41:46
  SPEAKER_01: Well, there you go, absolutely.
• 41:47
  SPEAKER_01: Consumer duty you mentioned as well, like you know, is anything around what this uh pillars client services lens will actually do to make sure that people aren't putting themselves in any kind of risk?
• 41:56
  SPEAKER_00: Yeah, absolutely.
• 41:57
  SPEAKER_00: I mean that's that's a key part of it.
• 41:58
  SPEAKER_00: So what what we fundamentally, and it's part of the pillar lens diagnostic and the sort of a monthly fee that we we charge is that you get this sort of a running commentary on where your consumer duty risks are at client level and and how you're changing them and evolving them and improving them, um, uh and making sure that they get to a point where if somebody comes in and asks you you know that sort of FCA visit or whatever it may be, that you can sort of say, kite marker quality, you know, this is the process we've got.
• 42:24
  SPEAKER_00: Here's our board report that says where we are from a consumer duty perspective, you know, our clients are more than well looked after across all the tenants of a consumer duty.
• 42:33
  SPEAKER_01: Because the last thing you want to do is feel like your client is wasting your time because it feels so negative that kind of that that kind of way of uh positioning it.
• 42:41
  SPEAKER_00: Yeah.
• 42:41
  SPEAKER_01: So the idea is that you pass it on to you, you do a phenomenal job.
• 42:44
  SPEAKER_01: These these uh client services managers are doing it day in, day out.
• 42:48
  SPEAKER_01: So there's a high retention area, there's an opportunity to unearth other you know, other investment opportunities, which you've said it does happen.
• 42:55
  SPEAKER_01: You've got to turn stones over.
• 42:56
  SPEAKER_01: Yeah, yeah, absolutely.
• 42:57
  SPEAKER_01: Someone could turn around and say, Look, we'll hire somebody to do that, but what a waste of time.
• 43:00
  SPEAKER_01: Yeah.
• 43:01
  SPEAKER_01: Yeah, it's a waste of time training to get someone to actually do that.
• 43:04
  SPEAKER_01: You're gonna have to pay them a salary.
• 43:06
  SPEAKER_01: They're not gonna do it self-employed, are they?
• 43:07
  SPEAKER_01: So you're gonna have to pay them a salary, there's gonna have to be training and development involved, and the likelihood is they're probably doing it to want to become a financial planner.
• 43:13
  SPEAKER_01: So the likelihood is they're probably gonna say, see you later, a bit later on when they've got a bit of experience.
• 43:18
  SPEAKER_01: So it kind of like becomes a bit of a a loss, really.
• 43:21
  SPEAKER_01: So the more you throw at it, it becomes a loss.
• 43:23
  SPEAKER_01: So the idea simply is that rebrand, sorry, not rebrand, uh segment pass to you, you continue to service it as a business grows.
• 43:31
  SPEAKER_01: There's probably more that filter down into that level as their average client size goes up.
• 43:36
  SPEAKER_01: Um there is a little opportunity here in the fact that you might be even building a trainy trainee financial plan and model yourself.
• 43:43
  SPEAKER_00: Yeah.
• 43:43
  SPEAKER_01: I can see that.
• 43:44
  SPEAKER_00: Yeah.
• 43:45
  SPEAKER_00: I mean, as again, that was one of the findings at the very start.
• 43:48
  SPEAKER_00: Um when sorry, before we actually built um Pellar was one of the sort of challenges we wanted to address was that lack of fresh blood.
• 43:56
  SPEAKER_00: I was very fortunate when I joined industry, I joined you know life companies.
• 44:00
  SPEAKER_00: where you got great training and great grounding, but you know, there's not a lot of that.
• 44:03
  SPEAKER_00: And again, when we were out doing the research and speaking to people in firms, you'd a lot of people who got pigeonholed in firms and they didn't get to progress the way they wanted to.
• 44:10
  SPEAKER_00: So you know senior admin, uh paraplanners who wanted to become advisors but actually just weren't getting the exposure and that would get them to that that were doing their exams and and we sort of say well if we can engineer a a sort of a runway that they can come on with us.
• 44:23
  SPEAKER_00: They're on their their exam journey, they can continue that exam journey but guess what we're going to do we're going to front load you with client interactions so you're going to get you know on average one of our review managers can do 600 of these a year.
• 44:34
  SPEAKER_00: So you're going to get a real full spectrum of client interactions you're going to get very good very quickly with client interactions or you'll sink because you'll you'll realize that the job's not for you and after a year or two you've probably done more reviews than most advisors do in five six years.
• 44:49
  SPEAKER_00: Yeah and guess what you're ready to become an advisor then so again within our sort of a structure the idea is that you know if you're working with us and your client review manager is working within your firm then you can take them off your hands into your your your firm as a financial advisor and carry on their the recruitment journey and we just keep you know filling it up at the back end with new trainees coming in.
• 45:10
  SPEAKER_00: So it's a sort of a runway to an academy almost you know so um it's it's not an academy as such we're bringing in people who want to become advisors giving them huge exposure to client interactions that gets them almost cash ready where they'll get qualified with us they'll get client interactions you know they'll they'll they'll get to know the the the industry inside out and then they can go on if they want to go on.
• 45:30
  SPEAKER_01: Very interesting so as client relationship managers you've got currently in your business at the moment and the ones you're looking to attract in the future as you obviously grow because it's very unique and pretty much every financial planning company is going to need this really so you were actually taking them through their qualifications as well then are you?
• 45:43
  SPEAKER_00: Yeah yeah it's a big part of it you know um I again I said I was lucky that I was was was was afforded that opportunity it was you know paid for for me to get qualified you know I did my FPC exams I did my MC exams you know all of those things and I just feel that you know and I know there's a lot of firms who do offer that but um our our point is that we we do that we give them the education part of it we give them the the actual qualitative part of it while they're actually putting it in practice.
• 46:08
  SPEAKER_00: Okay.
• 46:08
  SPEAKER_00: And that's the difference because then they come out the back end ready.
• 46:10
  SPEAKER_01: Okay.
• 46:11
  SPEAKER_01: So lots of financial planners listen to this uh lots of people who work within financial planning firms so definitely advise people to reach out to you and definitely advise anybody that's a power planner administrator financial advisor maybe you don't own the business but to you know maybe forward this podcast on to decision makers within the business right because it's only going to help free them up and um and grow grow as a business.
• 46:31
  SPEAKER_01: Now just very very simply the process from start to finish of working with you.
• 46:37
  SPEAKER_01: So they understand it so when they do forward it they can type it in a little email to their boss or whatever or to their business partner.
• 46:43
  SPEAKER_01: What's the simple process from start to finish of working with you?
• 46:46
  SPEAKER_00: Yeah look I think the the the great first step is after you've watched this podcast you know get in touch with us go on our website pillarcs.co.uk um send us an email give us a phone call book a demonstration in with us we'll show you what Pillar Lens looks like we'll show you a demonstration of that with anonymised um numbers uh and then we sort of go on the journey together and we sort of then say right how do we connect with your book we take you through your back office system and we connect you that and then we think about at the back end of that diagnostic what is what does help look like and then and does Pillar Client Services come in and work with you and we go on a bit of a journey together really and try and fix some of the challenges that they I believe the industry faced when I'd done the research and hopefully in five years' time I can look back and say we've actually managed to address some of those challenges and fix some of them.
• 47:35
  SPEAKER_00: Okay.
• 47:36
  SPEAKER_01: Great.
• 47:36
  SPEAKER_01: So anybody listen to this as well head to the show notes and you can uh download the white paper.
• 47:41
  SPEAKER_01: Yeah I'll get the way there's some other data on there that you can download um to give you some insight the website's going to be there and uh booking for the the demo is going to be there as well.
• 47:49
  SPEAKER_01: And just from start to finish how long does it take to actually use the full service of Pillar how how quickly can somebody on board and do this?
• 47:55
  SPEAKER_00: Well I mean I guess Pillar Pillar lens you you can you I mean you could you could phone me tomorrow and we could be up and running you know pretty much straight away.
• 48:02
  SPEAKER_00: It's just downloading on your back office system.
• 48:04
  SPEAKER_00: So hours if not you know it's more based on your desire and to get this fixed.
• 48:10
  SPEAKER_00: Pillar client services you're probably looking at about five to six weeks so we can do the onboarding part of it and make sure because that's fundamentally what we want to be able to deliver is a quality assured service to your clients so we don't want to do that half baked.
• 48:21
  SPEAKER_00: We want to make sure that we deliver as good a service as we possibly can so that takes a bit of time to get those obstacles cleared so when we're delivering to your clients we're delivering the best service they possibly can and quality assurance is fundamental we you know we want to make sure that every review we do is to the highest standard and we have a review process in place to make sure that happens.
• 48:38
  SPEAKER_00: So but that does take about five to six weeks to get onboarded with us.
• 48:41
  SPEAKER_00: Is there a limited number of clients is there a minimum I don't think we at the start we I was always sort of saying you know 100 clients minimum and then you know you get some IFAs who come along and say Brian but I've got 50 and my thresholds you know higher but the so so the reality is you know you don't know until you do the diagnostic so get the diagnostic done um and then you'll be in a better position to see what those clients look like you then put your human overlay on that and say you know that's my niece that's my nephew that's my grandson you know all of that stuff all the stuff we talked about earlier um you then get that final number and then you get to decide what you want to do with that number.
• 49:16
  SPEAKER_00: Love it.
• 49:17
  SPEAKER_01: Brian absolutely pleasure talking to you I'm the same look I've looked at the profession from the outside looking in for a long time I ran a recruitment business and I've seen some problems and that's what I'm doing.
• 49:26
  SPEAKER_01: I'm addressing those problems and offering a service that is going to help financial planning firms grow, get seen, get heard, build brand and attract talent and new clients you're doing exactly the same.
• 49:35
  SPEAKER_01: It's nice to meet somebody who's in change makers and fix it.
• 49:39
  SPEAKER_01: We may feel we may feel well we might everyone might fail but I tell you what when when when there's no competition out there in the same space that we're both in right you know in in in different businesses we should do well and I think people should be leaning into this and really seeing the value of what it is that you could offer because it does sound transformative.
• 49:54
  SPEAKER_01: So thank you so much Brian for sharing that with us your business we wish you the best of luck and of course uh we'll be pushing this out on LinkedIn and making sure that people know who you are okay.
• 50:03
  SPEAKER_01: Thank you very much.
• 50:04
  SPEAKER_01: Thanks for having me