CHANGE, CHALLENGE AND CLIENT COMMITMENT How to ensure you are fully remunerated by your clients for your value and wor

1. For financial advisers only CHANGE, CHALLENGE AND CLIENT COMMITMENT How to ensure you are fully remunerated by your clients for your value and worth Lawrence EmmBusiness Change Specialist

2. For financial advisers only Session 1 - Summary CLIENT NEEDS PROPOSITION SERVICE CONTENT PRICING PROCESSANDIT PEOPLE CAPABILITY ARTICULATING VALUE, WORTH AND EXPERTISE CLEARLY

3. STRATEGIC BUSINESS ISSUES Increase profitability and maintain capital adequacy Shift to client agreed recurring income Profitability and Financial Management Implementation with new and existing clients Adviser behaviours and remuneration Service and Pricing Processesand IT support Back office supporting processes Effective management Change ManagementCommunicationConsultationClear Direction Training and skills development People

4. THE VALUE OF FUTURE BUSINESSES? Brand, USPs Innovation High quality advisers Loyal clients Profitable cases VALUE ENHANCERS Clear advice proposition Sustainable recurring income Owners seeking immediate exit Owners hold key client relationships Reliance on small group of clients VALUE DETRACTORS Poor records and back office Poor and inconsistent compliance process No access to high value clients Adapted from source material: Ernst & Young/J P Morgan

5. Business Strategy Where are you going and how will you get there? Service Proposition Who are your clients, what will you do for them, how much will you charge? Process How do you provide excellent service at low cost? Financial Control and Growth How is the business performing and how will you sustain and fine tune growth? People Have you got the right people in the right jobs? Marketing How should you acquire and retain clients?

6. For financial advisers only Session 2 - Summary CLIENT NEEDS PROPOSITION SERVICE CONTENT PRICING PROCESSANDIT PEOPLE CAPABILITY ARTICULATING VALUE, WORTH AND EXPERTISE CLEARLY

7. SERVICE DESIGN PROCESS • Assume you are designing this for Day One of a newbusiness • Determine the number of client groups – no more than 3 • Give each list a SERVICE name • List ALL the service components for each client group • Price each service and estimate likely client numbers – check these against RI and support capacity and turnover and profit targets • List all of the processesthat are needed for each service • Identify what jobs/roles you will need (accountabilities) to deliver the processes

8. For financial advisers only ADVICE AND SERVICE PROPOSITIONS Financial Wealth Management ”We provide financial consultancy for business and private clients with complex affairs – we will work with other professionals to create and manage a comprehensive and evolving strategy on a bespoke basis” Financial Planning “We provide straightforward financial advice to make sure you have the right advice and product solutions for your immediate and future needs” Financial Advice “We will arrange to transact particular financial products at your request”

9. For financial advisers only Session 3 - Summary CLIENT NEEDS PROPOSITION SERVICE CONTENT PRICING PROCESSANDIT PEOPLE CAPABILITY ARTICULATING VALUE, WORTH AND EXPERTISE CLEARLY

10. For financial advisers only PRICE NEEDS TO BE BASED ON PROFITABILITY

11. For financial advisers only THE CLIENT’S PERSPECTIVE “Price is what you pay, value is what you get … … and the value of anything is the difference it makes”

12. For financial advisers only Session 4 - Summary CLIENT NEEDS PROPOSITION SERVICE CONTENT PRICING PROCESSANDIT PEOPLE CAPABILITY ARTICULATING VALUE, WORTH AND EXPERTISE CLEARLY

13. For financial advisers only CLEARLY DEFINED STAGES OF THE PROCESS REVIEWANDRETAIN ANALYSE AND PREPARE SOLUTIONS CLIENT ENGAGEMENT IMPLEMENTSOLUTIONS CLIENT ACQUISITION

14. For financial advisers only MAP BUSINESS PROCESSESthe complete client experience STAGE ONE STAGE TWO STAGE THREE STAGE FOUR

15. For financial advisers only ARE CURRENT ROLES STILL APPROPRIATE? Financial Planner: To acquire new clients and maintain key introducer and client relationships “ADVICE” Para-planners: To provide extensive technical support to the Financial Planner(s) “TECHNICAL SUPPORT” Client Support Services: To provide comprehensive administrative support to the PPs and FPs “ADMINISTRATION”

16. For financial advisers only ASSESSING BUSINESS CAPACITY AND CAPABILITY

17. For financial advisers only Session 5 - Summary CLIENT NEEDS PROPOSITION SERVICE CONTENT PRICING PROCESSANDIT PEOPLE CAPABILITY ARTICULATING VALUE, WORTH AND EXPERTISE CLEARLY

18. For financial advisers only CLIENT RE-ENGAGEMENT PROCESS

19. For financial advisers only CLIENT ENGAGEMENT – PLANNING TEMPLATE

20. For financial advisers only SETTING THE RIGHT TONE – CLIENT REASSURANCE Dear Mr Williams, You will be aware from recent press and media reports that significant changes are scheduled to take place within the financial services profession from January 2013. Here at Tollarday Wealth Management you will be pleased to know that we have operated ahead of these industry benchmarks for some time and pride ourselves that all our advisers, and a number of our client management team, are already qualified to Chartered Financial Planner status which is higher than the new professional standard set by our regulatory body. At our next review we will guide you through how we intend to simply formalise the way we have worked in partnership with you over the last 8 years while managing your tax and estate planning. We will also discuss how you will continue to receive the same high levels of ongoing advice and service in the future as one of our valued clients. If you have any questions in the meantime please do not hesitate to call me on 01234 567890.

21. For financial advisers only THE LANGUAGE OF VALUE AND WORTH OLD WORLD FREE NO OBLIGATION SALES COMMISSION ADMINISTRATION SUPPORT STAFF “EASY 5 MINUTE JOB” UNSTRUCTURED SERVICING NEW WORLD “AT OUR EXPENSE” COMMITMENT ADVICE FEE – SERVICE CHARGE CLIENT MANAGER - EXECUTIVE “USING OUR COMPREHENSIVE AND SPECIALIST TOOLS AND EXPERTISE WE WILL SORT THIS OUT FOR YOU” ROUTINE AND AGREED CONTACT

22. For financial advisers only SELLING THE SIZZLE

23. For financial advisers only SELLING THE SIZZLE

24. For financial advisers only TODAY: CLIENT NEEDS PROPOSITION SERVICE CONTENT PRICING PROCESSANDIT PEOPLE CAPABILITY ARTICULATING VALUE, WORTH AND EXPERTISE CLEARLY

25. For financial advisers only IMPLEMENTATION With only 5 months left till R-Day, how do we get our ideas into working practice?

26. For financial advisers only KEY BUSINESS ISSUES • KEY ISSUES have these characteristics: • What is REALLY important? • What can we INFLUENCE? • What is ESSENTIAL for this plan to deal with? • Key issues can: • exploit specific strengths and opportunities • dealwith specific threats and weaknesses

27. For financial advisers only TYPICAL IFA ISSUES • QCF Level 4 – Gap Fill - SPS • CPD • Sourcing and retention of the right clients • Remuneration – clients and advisers • Develop and enhance database – client management • Increasing client and adviser productivity • Define pricing strategy and associated service levels • People – recruitment, retention, qualification and training • Further develop management infra-structure • Exit plan and/or acquisition policy • Electronic commerce and technology This is a major shift of emphasis – by way of income, client/adviser management and infra-structure

28. For financial advisers only KEY ISSUES Significant Changes “Usual Day to Day Activities” Straight forward change in working practices Complex change – requiring extra resource Quick over-night change Relatively non contentious No time or cost implications Review and analysis required Structured implementation Time and cost implications

29. For financial advisers only EFFECTIVE BUSINESS PLAN • Turnover and profitability • Clients – numbers and types • Advisers – numbers, types and productivity • Administration and other staff – skills, job types, numbers • Organisation structure • Service and charges – different levels for different clients • Sources of business • Business mix – by product or area of financial planning • Processes and technology • Premises • Acquisition policy SCALE RESOURCE BUSINESS INFRA-STRUCTURE GROWTH To provide direction

30. For financial advisers only BUSINESS PLAN - OUTLINE

31. For financial advisers only IMPLEMENTATION • How do we get from now to the future? • What are the priorities? • What needs to change? • Where should we concentrate our effort? • Who will undertake the work? • When will we complete it? Effective implementation

32. For financial advisers only TYPICAL IFA ISSUES • QCF Level 4 – Gap Fill - SPS • CPD • Sourcing and retention of the right clients • Remuneration – clients and advisers • Develop and enhance database – client management • Increasing client and adviser productivity • Define pricing strategy and associated service levels • People – recruitment, retention, qualification and training • Further develop management infra-structure • Exit plan and/or acquisition policy • Electronic commerce and technology This is a major shift of emphasis – by way of income, client/adviser management and infra-structure

33. For financial advisers only PROJECT PLANS Project Name Reasons for project Project Objective Specific Actions Responsibility Timescale Resources

34. For financial advisers only PROJECT PLANS - EXAMPLE Responsibility, timescale and resources Confirm objectives Plan the work • Resource: • who • when • additional resource Objective: To out-source investment management to begin March 2012 • Actions: • confirm internal requirements • identify possible suppliers • research their methods • develop short list • invite candidates to tender • review against our criteria • consult across the business • contact and appointment

35. For financial advisers only ABSOLUTE CLARITY AND FOCUS

36. For financial advisers only IMPLEMENTATION TEMPLATE

37. For financial advisers only IMPLEMENTATION TEMPLATE - 2

38. For financial advisers only REHEARSE AND PRACTISE We can learn from the experiences of Heathrow T5 … Businesses need to move from concept to implementation by engagement and buy-in of all staff. By necessity this will mean significant investment in rehearsal, practise and review as well as the business setting clear expectations and managing performance.

39. For financial advisers only

40. For financial advisers only • This presentation is designed for and directed at professional financial advisers. It should not be relied on by consumers. • This document is based on Skandia’s interpretation of the law and the HM Revenue and Customs practice as at January 2012. We believe this interpretation is correct, but cannot guarantee it. Tax relief and the tax treatment of investment funds may change.

41. For financial advisers only www.skandia.co.uk Calls may be monitored and recorded for training purposes and to avoid misunderstandings. Skandia provides you with access to its investment platform, known as Skandia Investment Solutions. Within this platform you can open an ISA and Collective Investment Account provided by Skandia MultiFUNDS Limited, and a Collective Retirement Account and Collective Investment Bond provided by Skandia MultiFUNDS Assurance Limited . Skandia Life Assurance Company Limited, Skandia MultiFUNDS Limited and Skandia MultiFUNDS Assurance Limited are registered in England & Wales under numbers 1363932, 1680071 and 4163431 respectively. Registered Office at Skandia House, Portland Terrace, Southampton SO14 7EJ, United Kingdom. All companies are authorised and regulated by the Financial Services Authority with FSA register numbers 110462, 165359 and 207977. VAT number for all above companies is 386 1301 59.