by Ken Scott, Chief Executive Officer, Intellexis Plc 

Ken Scott, Chief Executive Officer, Intellexis Plc

‘Two years ago, there were 15 unprofitable firms; now there are probably only 15 that are profitable.’ Peter Hargreaves, Hargreaves Lansdowne 2002

What would you think of a motor mechanic who drove a car with a belching exhaust? Or a plumber whose house was full of leaky taps? Or a dentist with awful teeth?

You would probably think twice about using their services. So why is it that so many Financial Advisers – who build their reputations on persuading other people to manage their finances properly – generally have such a poor understanding of how to run their own businesses?

The answer is that Financial Advisers historically have succeeded because of their selling skills, not because of their business acumen. Living from commission cheque to commission cheque, or cushioned inside large institutions, there used to be enough business to go around and not much in the way of regulation or government interference.

All of that is changing, thanks to the new pressures squeezing margins from all sides: increased regulation, charge capping, stock market volatility, and skyrocketing insurance costs. Even supermarkets are starting to nibble away at the financial products market.

And the community is feeling the pain: a recent CEG Worldwide survey found not a single adviser willing to say that they were ‘extremely satisfied’ with their level of success.

These factors are well documented in the press, yet there is still an astonishing amount of complacency amongst Financial Advisers. For example, although the benefits of applying technology to such a records-based industry are clear, many Financial Advisers still keep only paper copies of everything.

The Ice Age is upon the industry, and those in the know are open about it. Ron Sandler, in his recent address to the delegates of The Future of Life and Pensions Providers conference in London, predicted that ‘Darwinian forces’ are going to ensure that only the cost efficient providers prevail.

How will you survive in the new era, when simply selling more in the same way as before is not the answer? How will you attract and retain clients who increasingly look for added value from an adviser – in many cases wanting additional professional qualifications?

There is one option that you can rule out immediately: that of doing nothing and hoping that things will get better.

The first area in which today’s Financial Adviser needs to succeed, before the leads, before even deciding on the products, is in putting together a business plan and a budget. You need to have a clear view of where your business will be in the future, and forecasts of your costs versus revenue, in order to answer the key questions:

• How will I differentiate my business from the competition going forward?
• What is my overall cost burden and how can it be controlled?
• Am I considering individual clients, corporate clients, workplace selling? How does each contribute to my revenue profile?
• Will I go for commission or fees or both?
• How will I identify suitable clients with needs to match my business model?
• What is my exit strategy? What do I need to do if I want to have a saleable, profitable business in 5 years time?

These are some of the areas in which Financial Advisers have expressed concern to us at Intellexis in the course of our research. It is clear that many in the profession understand all too well the pressures of the increasingly hostile trading environment, but are unsure how to acquire quickly the business knowledge that they need.

Whether you are thinking of going out on your own and are looking for a ‘start-up pack’, or have been trading for several years and need information in a specific area such as effective budgeting, we can deliver courses that will enable you to achieve your goals. Our flexible approach to learning will develop your business skills to match the professional approach that you have with your clients.

This is not knowledge for its own sake; improving your financial competency will have a direct effect on the success of your business.

To find out how much you could benefit, just go to www.intellexis.com and click ‘Check your financial awareness’. You may be surprised by the results.

About Ken

Ken has a rich background in business leadership and commerce, a great deal of which has been gained in financial services. A Fellow of the Chartered Institute of Bankers with a Diploma in Business Administration from INSEAD and an Executive MBA from Harvard Business School, he has for the past 2 years been CEO of Intellexis plc, a London listed education and training consultancy. His previous roles include positions as UK country head for Avco Trust (consumer and business financing), CEO of Hamptons Estate Agents, Group Marketing Director of Bristol & West and Regional Director for one-fifth of the UK retail branch network of HSBC.

Ken has a strong background in business management and sales and marketing of financial services products and related offers. He is a strong advocate of customer retention activities and of seeking ways to gain long-term competitive advantage. In his current role, he re-directed Intellexis from imminent financial failure and set it on course for a profitable future.