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To many people, Six Sigma is ‘something done in manufacturing’. To me having spent six months obtaining my Black Belt and reviewing the processes within my own business, At We Complement we totally disagree.

Although Six Sigma has its roots in the 1980’s it has been applied successfully within the services sector for decades. Banks, Universities, Hospitals, and local governments are some of the diverse places that have benefitted from Six Sigma. There is even a book written in 2003 by Michael L George dedicated to the topic.

It is not only large companies, Six Sigma can be introduced into small businesses to improve processes. Including growing financial planning practices.

Six Sigma ranks among the foremost methodologies for making business processes more effective and efficient. In addition to establishing a culture dedicated to continuous process improvement, Six Sigma offers tools and techniques that reduce variance, eliminate defects and help identify the root causes of errors, allowing organizations to create better products and services for consumers.

People develop expertise in Six Sigma by earning belts at each level of accomplishment. These include White Belts, Yellow Belts, Green Belts, Black Belts, and Master Black Belts.

Does it work? Motorola reported in 2006 that the company had saved $17 billion using Six Sigma.

Experts credit Shewhart with first developing the idea that any part of the process that deviates three sigma from the mean requires improvement. One sigma is one standard deviation.

The Six Sigma methodology calls for bringing operations to a “Six Sigma” level, which essentially means 3.4 defects for every one million opportunities. The goal is to use continuous process improvement and refine processes until they produce stable and predictable results.

Six Sigma is a data-driven methodology that provides tools and techniques to define and evaluate each step of a process. It provides methods to improve efficiencies in a business structure, improve the quality of the process and increase the bottom-line profit.

A key component of a successful Six Sigma implementation is buy-in and support from executives. The methodology does not work as well when the entire organization has not bought in.

Six Sigma uses a DMAIC methodology for improving existing business processes. The letters stand for:

• Define the problem and the project goals
• Measure in detail the various aspects of the current process
• Analyze data to, among other things, find the root defects in a process
• Improve the process
• Control how the process is done in the future

If you are creating new processes then the DMADV methodology is used:

• Define the project goals
• Measure critical components of the process and the product capabilities
• Analyze the data and develop various designs for the process, eventually picking the best one
• Design and test details of the process
• Verify the design by running simulations and a pilot program, and then handing over the process to the client

The other big methodology is the Five Whys. This is a method that uses questions (typically five) to get to the root cause of a problem. The method is simple: simply state the final problem (the car wouldn’t start, I was late to work again today) and then ask the question “why,” breaking down the issue to its root cause. In these two cases, it might be: because I didn’t maintain the car properly and because I need to leave my house earlier to get to work on time.

Six Sigma in Financial Planning?

All the Six Sigma tools and methodologies serve one purpose: to streamline business processes to produce the best products and services possible with the smallest number of defects. Its adoption by corporations around the globe is an indicator of its remarkable success in today’s business environment.

Whether you are looking to improve your complete advice processes, your annual review process, your CIP, CRP or any element of your business speak to us about how we could use Six Sigma to improve the effectiveness of your financial planning business.

I now know this methodology can be applied into financial planning practices too. Read a case study here.

Tony Slimmings – MD

When you consider your daily activities, each one is a sequence of steps that make up a process. This can be anything from getting up in the morning, making that very first morning coffee, driving to work, or searching for car insurance. Most things involve a process in some form. Process mapping is a technique that allows you to visually represent these processes, tasks, and workflows. While it might not be appealing to map out your personal routines, in a team or work environment, a process map can bring clarity to everyone involved and is likely to enhance the process itself.

By mapping out a process in detail, organisations can identify inefficiencies and bottlenecks that can then be addressed and improved using Six Sigma and other tools. It also shows that organisations can demonstrate robust internal procedures and processes and better define roles and responsibilities Additionally, process mapping can help reduce costs and improve the quality of a service or the advice provided by a firm.

The benefits are numerous. Firstly, process mapping can help organisations identify areas of waste or inefficiency. This can lead to the reallocation or redistribution of resources to areas of greater potential, thus saving time and perhaps reducing costs. Additionally, process mapping can help organisations identify areas of overlap and communication points between teams or departments and highlighting opportunities for improvement or development. By doing so, processes become more efficient and effective.

By mapping, firms can identify areas of greatest risk and then address them accordingly. This can help the reduce the risk of errors or costly mistakes of various kinds. Additionally, process mapping helps internal practices stay up-to-date with regulatory changes and industry trends. This can support maintaining a competitive advantage.

Finally, mapping can help organisations grow and increase customer satisfaction by ensuring that their processes are efficient and effective. By mapping out the process and testing it on staff that don’t work in that area, or with test clients, firms can identify areas of confusion or difficulty for customers and address them accordingly. This can help firms increase customer satisfaction and loyalty, as customers will be more likely to stay loyal to an organisation that is responsive and proactive about their needs. (I didn’t want to make this yet another consumer duty blog but it always creeps in somewhere!)

Making organisational processes more efficient and eliminating unnecessary steps is a no brainer. However, before taking any action, it’s essential to ensure that all team members are in agreement. Process maps are an excellent tool for depicting a process within a team and promoting collaboration and input from team members. By visually displaying all the steps and decision points involved in a process (including who executes them), completing a map provides a clear organisational snapshot. This snapshot can serve as a starting point for the way forward.

Our team is on hand ready to help map your way forward, giving We Complement a call is a great starting point.

Thanks to Consumer Duty, our need for efficient and streamlined operations has never been more critical. Financial advisers are constantly seeking tools that not only simplify their workflow but also enhance their overall productivity. One such tool that has gained significant traction in recent years is Intelliflo Office. A comprehensive practice management system designed to meet the unique needs of financial professionals. So it would seem that for many financial advisers, this is the preferred back office product. Perhaps this is no surprise as according to the market statement, Intellifo’s services are used by around 30% of the advi.ce profession.

We are not connected to Intelliflo office in any way and will always select a back office system that is the right one for our clients. We just understand that so many firms are not getting the best out of their Intelliflo office licences. The question that often arises is, “Are you truly leveraging your Intelliflo Office licence to its full potential?”

Yes keeping in touch with your clients on a regular basis is a great thing to do, however, as you will no doubt know, the Financial Conduct Authority (FCA) also requires advisers who supply investment advice to do annual planning reviews in a formal way. Specifically, you should “agree with a client whether a periodic assessment of suitability will be performed. If periodic assessment is to be performed it must be at least annually and the continued suitability confirmed in writing”.

These annual planning reviews (which we can help with, more of which anon), are a valuable opportunity to have a really in-depth check-in with your client – and the best ones focus on the person, as well as the products.

So, while it is possible to include everything on one page, at We Complement we believe APRs should become a document of your client’s annual financial planning journey – not just a snapshot.

For example, while obviously you need to include details of all current investments, their performance and any recommendations you would make, a good APR will also appraise your customer’s circumstances – what are they investing for, how they are planning on making it work and any worries they may have.

Clearly, this is considerably more time consuming for an IFA – which is where the We Complement team come in.

We will work with you to develop a document which is personal to each client, while also ensuring it truly represents your brand. We will undertake all necessary research to emphasise the value you have provided during the previous 12 months – and how you will continue to do so in the future.

We can also access all the necessary information on your system, such as products, planning and risk profile, and add these to the APR document, giving an overall review that provides a truly detailed view of your client’s financial year.

We Complement believes that your annual planning reviews are a great opportunity to engage fully with the financial planning needs of your clients. Sending a one page summary just seems to be such a wasted opportunity not to take the chance to engage positively with them.

Once we have all the details we need, we go ahead and prepare the review, and typically produce reports in five to seven working days.

For more information about our annual review offering and complementary offerings, and how they can benefit you and your clients, please get in touch.

So, as we come to the last quarter of 2023, you might be thinking about the next 12 months and what working with outsourced paraplanners might mean for you and your business.

With this in mind we have highlighted five important points regarding how we believe we are the go to support to help Financial Planners deliver high quality bespoke financial planning outcomes for their clients in 2024.

Learn to collaborate with our experts and see them as a partner

While in the past paraplanners, or technical analysts as we call them, have largely been hidden from the client spotlight, they are, in the main, every bit as qualified and experienced as advisers to deliver a great client outcome. Involving a paraplanner in meetings also allows you to concentrate on your rapport while we take notes and are on hand to answer any tricky technical questions the client may have.

Having a paraplanner attend the meeting is all good in theory, but if your meetings are all conducted face to face this could be a logistical nightmare. Many advisers now do the next best thing and record meetings or include our paraplanners virtually by video link, as it can be so beneficial to hear the client in their own words. This gives us a clear mental picture of your client that we can use to develop a detailed summary of their circumstances and why a recommendation is right for them.

Top Tip: Recordings can sometimes be long and time consuming for the listener, so why not just record the last 30 mins of a meeting where you round up the meeting and briefly go back over the key points that have been discussed?

Our team use a wide and varied selection of back-office systems

By taking an impartial view of your administration and processes, we can identify ways to make your back-office systems more efficient and robust against an FCA check. Having a streamlined back-office system could also mean happier clients and potential recommendations that lead to new business.

Outsourced Paraplanners can provide specialist technical advice

Whether it’s for defined benefit (DB) pension transfers or long-term care, outsourced paraplanners typically provide specialist technical advice. If you have an in-house paraplanning team, choosing to also work with an outsourced provider enables you to swiftly access specialist information.

An outsourced paraplanner can also provide specialists who could join complex client meetings. This could improve your chances of securing the business, ensure the suitability report is as robust as possible, and ensure work is produced promptly.

Having a centralised system is essential

As we head into 2024, being able to demonstrate robust, repeatable and reliable processes is more important than ever thanks to consumer duty. It’s as important as being able to show your business is consistently providing excellent outcomes for clients and treating them fairly at all times.

Adopting a centralised retirement proposition (CRP), a centralised investment proposition (CIP) and a centralised advice framework (CAF) could help you do this. Our Managing Director Tony Slimmings has written white papers detailing all of the above.

Outsourcing support reduces staffing issues

As paraplanning is often seen as an entry point into financial advice, your business could struggle with a high turnover of in-house staff moving on to become financial advisers. An outsourced team means you won’t have the stress of recruiting new team members, nor will you need to worry about cases being dealt with when members of the team are off ill or on holiday.

Furthermore, you can always be assured that you will have access to high quality and professional outsourced paraplanners.

For us, report writers are individuals who’re fed client information by the adviser that is subsequently transposed into a standard template. This requires little input from the report writer and does little to influence the outcome. Paraplanners like us at We Complement are technical analysts, and as you can see, using a paraplanner for more than report writing could help you generate more business.

Ok, we are a little biased, but we do believe outsourced paraplanners can add a whole new dimension to your business and your client outcomes. If you would like to discuss any of the above points, or how we might help your business in 2023, contact us here or call on 01472 728 030

Centralised propositions allow you to demonstrate robust, repeatable, and reliable processes. With Consumer Duty fully upon us it is more important than ever that you can evidence consumer value and consistency of service. It’s as vital as being able to show your business is consistently providing good outcomes for clients and treating them fairly at all times.

Adopting a centralised retirement proposition (CRP), a centralised investment proposition (CIP) and a centralised advice framework (CAF) could be key to achieving this.

Read on to discover five ways these centralised systems could provide greater protection against complaints and potentially boost business.

Ensures your business can stand up to scrutiny

Centralised systems allow you to demonstrate to the FCA that you and your company has a robust, reliable, and repeatable process. This could be critical in meeting PROD guidelines and COBS 9.3.3, which requires you to consider all relevant client information before making a recommendation.

A CAF ensures your business meets the 11 FCA core business principles and, in particular, makes sure that you put “customers’ interests” first.

Ensures your recommendations are always appropriate

The FCA knows that clients’ situations differ, and so will check to ensure they have not been “shoehorned” into the same solution – especially where retirement is concerned.

Having centralised systems, such as a CRP, means you can demonstrate

that you’ve collected all the relevant hard and soft facts, recorded them, and considered the client’s individual situation.

With a CIP, any investment or product you recommend will be from a centralised selection that has been assessed and found to be suitable for your clients. This is more likely to result in a good outcome for the client, reducing the chances of complaints or an FCA investigation.

Reduces risk for the business

A centralised and consistent advice framework, such as a CIP, helps eliminate the chance of errors and omissions. This dramatically reduces the risk of a recommendation turning out to be wrong, or not be in the client’s best interests.

As such, complaints against you and your business are far less likely. Furthermore, it will mean happier clients, which could mean referrals and future new business.

Improves business efficiency

Each of the centralised systems require you to gather all the information needed by your paraplanners, allowing them to produce a clear and compliant suitability letter more quickly. This is because they will not need to chase you for missing information or clarification on key points.

Because a CIP removes the need to undertake investment and platform research for every case, your business will be more efficient, providing quicker outcomes for your clients. This could mean you can arrange that all-important presentation meeting sooner.

Allows you to spend more time with clients

This dovetails into the above point of having a more efficient business. Documented centralised propositions allow you to concentrate on delivering what clients really want: good financial planning and a first-class service.

This is likely to result in happier clients who then provide referrals, allowing you to build your business while reducing the potential of complaints.

Get in touch

We have been helping businesses develop and integrate centralised systems for many years, and have tested many for robustness, reliability, and repetition. If you would like to learn more about how we can offer support in establishing centralised systems please visit our website or contact us. You can get in touch online or by calling 01472 728 030.

What is a central investment proposition?

A central investment proposition is a standardised investment approach that allows independent advisers to offer a comprehensive, consistent, and value adding investment solution to all their investment clients. They are a key part of an holistic advice process for all financial planning firms.

It means that instead of conducting whole of market investigations advisers can focus on a range of providers and products within a well-researched Centralised investment proposition (CIP) which is reviewed on a regular basis by an investment committee.

4 out of 5 independent financial advisory firms already have a central investment proposition of some kind. However, probably all of these need to be reviewed in the next few months in line with the impending Consumer Duty requirements.

Who benefits from a CIP?

A crucial aspect of a CIP is that it must not just be a good fit for the advisory firm but more importantly for its clients. A good CIP should reflect client segmentation. A good understanding of knowing which client fits into which segment means clients are dealt with efficiently and from a regulatory viewpoint, compliantly.

Flexibility for clients is also a vital consideration, life events can dramatically change a client’s investment requirements. It should also meet the needs of various attitudes to risk and investment time frame windows. An offering of passive and active investments, ethical offerings and different tax options also make a robust client friendly proposition.
Any costs should be transparent.

How does a CIP work for an advisory firm?

Some firms have an investment committee that meet regularly to gauge whether their picks are providing what they set out to do. They chose which providers and products to place within their CIP. They also set the parameters of when advisers can go outside of the CIP. An experienced paraplanner, in-house or external, is an ideal person to sit on this committee.

Establishing and running a centralised investment proposition has always been a challenge for smaller to medium independent advisory firms. The introduction of Consumer Duty makes the challenge slightly harder and more accountable.

There should be no blurring of lines between efficiency for a business and what is good for the consumer.

Firms that have investment committees that consistently appraise investment selection, performance and value for money for their clients have real responsibility.

Inhouse research is expensive from a time perspective. It is also pressurised because the aim of achieving positive performance on a value for money basis can be hugely impacted by markets. Any member of an investment committee working in the summer of last year can relate to this.

Third party offerings

Investment selection can be delegated to a third party but is important advisers know their responsibilities to the third party and their own clients.

A range of players have entered the market with the aim of providing outsourced investment solutions for advisers and to take away some of the challenges of running a centralised investment proposition.

Managed Portfolio Service (MPS) providers, Discretionary Fund Managers (DFM) and platform providers have all realised the IFA community is a good place to expand their own businesses.

The challenge for businesses moving away from their current self-picking system or to another third-party provider is to ensure any migration does not have a negative impact on their clients. They will also need to ensure that any proposed solution will fit in with the customer journey, segmentation and be flexible enough to adapt.

Due diligence should be comprehensive. There is a real challenge for an adviser to explain why their firm is moving from one third party to another in a short space of time.

Consumer Duty means that most firms are reviewing all aspects of client interaction.

Recently five different third party providers were recently interviewed by an adviser business. Only one of them had a clear plan for how it would operate under Consumer Duty. So, it really is important to look at governance when considering working with any third party provider.

Whether having an in-house selection approach or that of using a third party, the consideration of providers Consumer Duty plans should be a key consideration.

Back-office systems

Another consideration when establishing an effective Central Investment Proposition is ensuring the chosen risk profiling tool works in conjunction with CIP offerings. Compatibility of a client’s attitude to risk with a selected product or fund should be in place.

Complacency

Which CIP option an advisory firm takes the main thing to consider is accountability. CIPs should be reviewed on a regular basis, and good record keeping of discussions on the topic made.

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.