Intelliflo - Online adviser software

The Three R's - recording, reconciling and reporting

By Guest blogger, Mark Davidson
28-Jul-2014 17:02:00

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By Mark Davidson, Consulting Director at Jigsaw Tree

An area that has consistently frustrated adviser practices over many years is the recording, reconciling and reporting of revenue. As the industry has developed from a transactional model, where income was just about the next big deal, to one of service with multiple recurring revenue streams, the position has got even more challenging.

Starting with the end in mind, firms are keen to secure accurate management information that can deliver historic analysis, illustrate pipeline activity and forecast what can be expected in the future.

Assessing client profitability and adviser productivity, are features of a well managed business and for a lot of firms, this is either not feasible or the accuracy of the data renders the outputs pretty useless.

Combine this picture with the commonplace position of legacy clients, built up over time or often from one or more acquisitions, and as a consequence there are not many businesses out there that are allocating every penny of income to a client or indeed anywhere near that.

Plus the existence of multiple income streams from recurring adviser charges to level commission and various methods of statement delivery including paper and EDI, combine to create a scenario where it is very hard to be sure that all monies due are indeed received.

Talking of EDI it needs to be mentioned that back office suppliers and providers, have worked hard to help introduce a level of automation to this process. There is no doubt that this has delivered efficiency gains but take up has not been universal and not all providers have supported these initiatives.

Finally users have oftenstruggled with implementation and adoption, so the benefits have not been in line with expectations. The net result is, that the overall outcome can still miss addressing the needs here.

In the last year or so many adviser firms, as they worked on their value propositions, looked at what they did for their clients and in the case of portfolio management, asked themselves if they were best placed to do that moving forward or if specialists could do a better job. Thereby allowing them to focus on what they do best. By another name we know this as outsourcing. So does it need to stop at the process of managing money? Not so in our view.

It makes good business sense to look at other processes and make the same judgement. To succeed in this market firms will need to deliver more and more client value and do so in a scaleable and effective manner.

Strengthening a process like revenue management by partnering with specialists, while at the same time creating capacity to deliver greater levels of client satisfaction has the potential to be a win, win strategy.

 

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