A few thoughts about branding, client retention, and a broken business model.
One of the first things I was told when I started my business was to work out how to get out of it, whether by glorious sale or forced liquidation.
It’s not what you want to be thinking about in the excited flush of a new venture, sitting in the spare bedroom planning how to conquer the world, but they were wise words. They came from my father, who had experience of such matters. And not a good experience. I took heed.
Consequently, I called my company Ovation Finance. It’s not called Chris Budd Finance. It’s not about me. I don’t want it to be about me. Because if it’s all about me, how could I ever leave it? Not that I have any plans to (he added quickly!), but it’s good to have options.
In the ensuing 15 years, I have mulled long and hard on how else could I make this business an autonomous entity. One of the first conclusions I reached was that the traditional IFA business model was not for me. Our industry has been – is? – populated by roving client banks, advisers with a ‘my client’ mentality, who would move to another firm if offered a higher split of commission.
This was not for me. I wanted advisers committed to helping build a practice, and be well rewarded for doing so. It was genuinely shocking to me throughout the last decade that nobody else seemed to share this vision. Recruiters admired the business model, told me it was the way of the future, and then said they couldn’t find any advisers who would want to work in such a business. The ‘My Client’ mentality was – is? – prevalent.
What’s wrong with this approach? Firstly, it’s not the best for the client. The ‘my client’ adviser only advises on the subjects they know about. For a knowledgeable, experienced adviser that could be ok, but do we all really have every subject covered? I have certainly heard of advisers who didn’t talk about pensions to their clients because they didn’t understand the subject.
Secondly, as many many people have been discovering over the last 18 months, there is only a very limited value in an individual with clients. There is value in a practice with a strong brand.
And the alternative? For the business model, I looked to the accountancy world. Different areas of expertise held by different people. An audit partner, a tax partner, a corporate finance partner. One main point of contact, but other experts brought in as appropriate. And strong income streams.
We have then worked hard on the branding of the practice. Clients meet all staff, we hold client networking events, we have a service proposition and fee model intended to make clients feel ‘one of the gang’. I can talk for ages on this subject, perhaps it’s best left for another blog!
I’d love to employ more advisers, and there is no doubt that my business has not grown as fast as it could have had I done so. However, I honestly believe that hiring advisers with a ‘my client’ mentality would have taken focus away from strengthening the relationship between our lovely clients and Ovation.
Most importantly, clients feel that their relationship is with the business, with the whole team, not just with Chris Budd. This is best for the client, for the business, and for the staff. And as for me, I have made my father proud, which might just be the most important thing of all.