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This article outlines a case study for a financial planning firm that we worked with on a process improvement project and increased efficiency and productivity.

FYI, Adviser Wealth is an alias for a firm that would rather remain anonymous!

Adviser Wealth – Case Study

About Process Improvement

Adviser Wealth is a leading financial practice based in Hampshire. The Adviser Wealth team is made up of 3 advisers, 4 administrators/junior paraplanners, and 2 paraplanners.

Adviser Wealth puts its people at the centre of everything they do. The team’s excellent principles and values are why Adviser Wealth has successfully provided clients with excellent financial planning outcomes for over 35 years. In particular, providing bespoke solutions to help clients meet their objectives.

process Improvement Challenges

Adviser Wealth has successfully supported the development of two paraplanners into advisers. This has left a serious lack of experience within the paraplanning team and means that the firm is beginning to fall behind when it comes to preparing the 25 annual reviews required each month.

Adviser Wealth was quick to address the need for additional paraplanners to support their existing ones and decided to outsource some of the paraplanning, as this would offer a flexible solution to assist in-house paraplanners when periods are busy and be able to switch off in those months when things are quiet.

After reaching out to 3 different paraplanning firms and having chats with all it was decided that We Complement would make a great fit as their company values mirrored their own.

Process Improvement Solutions

After going through a smooth onboarding process with our process consulting team, we completed a process map. This helped us to identify the specific areas where Adviser Wealth needed support and helped us see where we fit in in terms of their bigger picture.

This process improvement project also helped We Complement to make strategic suggestions as to where small changes could be made to existing internal processes, which would then further improve efficiency and productivity.

We identified that the in-house paraplanners were unsure as to what needed to be included in a suitability letter and what information could be left on the client file. Meaning some of the existing Suitability report templates were over 30 pages long. Not only were they uninspiring to look at, but they were also written for compliance people and not the client!

We Complement senior analysts worked with the inhouse paraplanners to create a suite of slimmed-down templates, which were bespoke to Adviser Wealth and are consumer duty ready. These fully functional templates use a snippets system that really optimises efficiencies in producing the report, meaning an annual review that previously would take a paraplanner on average 5 hours to complete could be completed by a junior paraplanner in 3 hours. The inhouse paraplanners and junior paraplanners were all trained on best practice in using these templates, and We Complement provided weekly check-ins to ensure they continued to be used efficiently and could be called upon to provide overflow paraplanning support as required.

We Complement is now looking at the Adviser Wealth technology overall, to ensure all licenses are being used to their maximum capability, but more on that later!

Give us a call to discuss what you would like to get out of working with us on a process improvement journey with We Complement. Contact us online or call on 01472 728 030.

I am seeing an increase in the number of advisers and providers who believe that a centralised retirement proposition is more than just the latest retirement buzzword. Despite this, there still appears to be no universal definition of what a centralised retirement proposition (CRP) is. In my view, however, they are not just simply withdrawal-based CIPs.

I have always believed a firm should have its own bespoke CRP. I also believe that, if anyone’s ever going to have a financial planner engaged, it should be in retirement. However, there are several elements’ advisers must be aware of when commissioning or preparing such propositions – this is not the time for cutting corners.

Ongoing suitability

First up is ongoing suitability; it is important here for advisers to remember that pension drawdown isn’t a product, it’s a pathway. It may be something to consider once a client is in retirement and looking at possible decumulation, but the bigger picture needs to be considered.

As we all live longer, retirement comprises a number of stages, from the first flush of activity filled with holidays and grandchildren to the later years, which may feature ill health and the need for fully supported accommodation.

All clients are unique but do share common fears, concerns, and desires for good quality life at all ages but especially in retirement. People have different ways of achieving those desires, so, rather than shoehorning every client into flexible drawdown solutions, advisers must always focus on what is right for the client.

Therefore regular reviews are vital because, while it’s important to have a plan, a ‘cash flow forecast’ or the like, at the start, once that plan has been drafted, it will immediately start to erode and become wrong. Therefore, an adviser should come into their own in retirement as their role and advice becomes a lot more critical, focused on ensuring that the plan remains suitable during the clients differing retirement stages, rather than simply concentrating on individual products.

An effective CRP is not simply about how money is invested; it must also consider each client’s behavioural biases, health issues, and legacy plans. It involves difficult discussions, handled sensitively – after all, none of us want to leave this mortal coil but we are all going to, and an adviser has to be that critical friend making sure the pathway is suitable.

Because assessing a client’s attitude to risk and capacity for loss is not just terminology to tick off; it should be part of an overall ongoing discussion document that paints a unique, bespoke picture of each individual’s life.

Sustainable withdrawal rates

As highlighted in the excellent book ‘Beyond The 4% Rule: The science of retirement portfolios that last a lifetime’ by Abraham Okusanya, we need to think differently about income drawdown sustainability and consider different income solutions for different client’s income needs. This change in mindset will not be easy and the requirement for a new solution to a new problem has not been universally embraced by the advisory community.

In my 30+ years in the financial planning profession we have seen the many recessions and financial crises, such as the tech meltdown of 2000 to 2003, the great recession of 2008, and a pandemic. No one saw any of these coming, which highlights the importance of having investment portfolios built in such a way that clients have a plan to get through 40 years of retirement.

Any adviser who writes up a plan and sends retirement clients on their way is not doing the job properly in my view. They need to be tapping the tiller every six months or so to make sure that the clients’ withdrawals are still suitable for their retirement stage and continue to be sustainable.

Everything should start with the individual client and, as much as possible, their personal health and longevity position, not the mass market and lazy use of ONS averages. Every client will have their own requirement for income, their views on what core (essential) income is, their own mix of pension savings, debts and liabilities, their own needs and circumstances, and their own views on what investment risks are acceptable. It will be different for everyone and so everyone will have their own view on Safe Withdrawal Rate (SWR).

One way to define, and evidence, the SWR applicable to each individual is to approach it from two perspectives.

1. Ask the client to define their income needs, and split between essential expenditure, and discretionary spending.
2. Understand and establish the ‘controls’ for each income stream. The moving parts can explicitly define how the SWR is achieved.

Drawing up a centralised retirement proposition

The idea for an effective centralised retirement proposition is that it can be used as a template for each client and, while they may all end up in a different place, they’ve all been through the same process. It should be a document that can apply to a retired doctor or a retired dustman; both will go through same discussions and end up will be in the right place for them.

Below is a checklist of the areas to consider when developing a CRP or retirement planning process:

• PROD: Is it documented. Is ?t embedded in your DDQ?
• Evidencing value for money – FCA consultation paper CP20/9
• Cashflow Tool: Do you use one. What are the assumptions within it?
• Retirement Fact Find: Updated date. Does it include soft facts?
• Annuity Rates: Checked rates. Update frequency?
• Safe Withdrawal Rate: Rate used. Consistency. Evidence?
• Cash Buffer: Yes or No? How held (on/off platform). How much?
• Risk Profiling: ATR. C4L. Need for Return. Risk tool Due Diligence?
• Inflation Assumptions: Rate used. Evidence?
• Taxation and allowances considerations: Income Tax and Lifetime Allowance etc.
• Sequence Risk: Understanding and explaining it. Mitigation Strategy?
• Investment Philosophy: Is it documented. Evidence?
• Investment Service: Pots or Single? Small Pots. Evidence/DDQ?
• Adviser Service Offer: PROD segments. Drawdown service?
• Adviser Fees: £s or %. Small pots. Long Term. Documentation?
• Platform for Drawdown: Checklist (PROD and Service). DDQ?
• Client Understanding: Process. Simplicity. Documentation?
• Vulnerable Clients: Statement. Process. Documentation?
• Conflicts: Issues. Management strategy?
• Showing Your Value: Examples. Communication?

And last, but not least is it aligned to your consumer duty requirements?

We Complement works with firms to build a centralised retirement proposition, which should reflect a firm’s ethos, their desire to help, what’s right for their clients and their investment beliefs, creating a document they can use as a guide each time.

A successful CRP is a living, breathing document, constantly updated to reflect a client’s changing desires and circumstances. Our aim is to support advisers to create such documents while maintaining regulatory consistency to keep everything in check and make sure the client is happy – which should be everyone’s goal.