Before rushing to make changes to the way they operate, advice firms should consider everyone involved in the process and consult employees and clients for feedback, writes Simon Youlton of Entire Wealth Management.
Financial services firms need to be able to cope with continuous change. At Entire Wealth Management (EWM), the need for continuous improvement and, at times, radical change is viewed as a necessity. External pressure often comes from the regulator and change is very much part of everyday life.
How can firms avoid suffering from change saturation? Many businesses have failed because individuals suffer from change fatigue and give up part-way through the process. This phenomenon is so common in many businesses that staff at all levels regard change as disruptive and intrusive, even harmful.
The danger is that in failing to make changes, a business can stagnate and fall foul of the regulator.
No change without people
One of the first points to consider when deciding whether to change something, whether part of a major project or no more than a process tweak, is to assess who is likely to be affected by it and how. This is vital in understanding how best to communicate what will happen and why it needs to take place.
How staff perceive such change will depend on where they are positioned in the business. Making sure everyone involved has a part to play in the process of change is fundamental. Air any concerns early on and make sure everyone knows what this means to them before starting the process.
The RDR as an example
One example of a change all of us are familiar with is the retail distribution review (RDR). Although this was prompted externally, it has had a major impact on most of the functions of advice firms. The pre-RDR perception was mainly that advisers needed to change the way they discussed charges with their clients, reach higher qualification levels and complete more continuing professional development.
However, what about all the other functions in an advice business? Handling commissions, chasing policy information from providers, gathering information on charging structures of existing plans, producing research reports, managing an adviser’s diary and having regular client contact are all crucial aspects of the business.
In our firm’s case, these tasks are often fulfilled by the back-office team. They all had to adjust to the changes required by the RDR and needed to have as much understanding about it as any adviser operating in today’s new world.
Implementation in regional offices
Our efforts have recently been focused on trying to involve as many people as possible in any change initiative we plan to undertake. Experience has taught us that pursuing a process of change without including everyone in the decision making might stick on paper, but not in practice.
Another important factor is how change is communicated within the business. EWM has advisers based in different parts of the country, so we cannot expect a particular change to be accepted in the same way at a regional office as at the head office.
If you work away from the office, it is easy to feel as if you are always on the receiving end of something decided elsewhere. We try hard to avoid this situation, which is why the initiatives currently being piloted at EWM involve several members of the team who are not office-based. Those employees are all contributing and feel they are part of the overall process.
What clients want
The final point, often one of the easiest to neglect, is that any change should have a positive impact on the client. If you can involve your client throughout, even if this is just through conversations during the advice process, it will provide an extra reality check that could save your business from having to make an embarrassing U-turn later on.
Asking a client what they thought was good or bad about the service, or how they would feel if the company changed the way it was doing something, may be all that is required.
Not all changes or projects you plan will be successful: some will almost certainly be more difficult than others. Everyone has experienced something similar. Sharing such stories in your team and learning from the experiences you gain are among best ways of making sure you are ready to tackle the challenges to come.
Simon Youlton is director at Entire Wealth Management.