When was the last time you reviewed your own processes, asks Peter Welch, head of sales and distribution at Bridgewater Equity Release

In retail financial services it seems to me we’re a little bit over-protected compared to other industries such as manufacturing or retail. What I mean by this is that in manufacturing, for example, unless you’re continually improving your processes to keep them as ‘lean’ as possible, then sure as eggs is eggs, local or global competition will at worst put you out of business or at least put a major dent in your profits.

The reality, particularly at point of sale, is that financial services advisers are not yet truly exposed to competitive market forces. And I’d argue that most advisers only measure the efficiency of their face-to-face sales process in ‘binary’ terms (assuming of course its right for the customer to follow a particular recommendation) i.e. ‘If the client does business with me its successful, if they don’t it’s not’.

Delving a little deeper into the sales process it’s not quite as black and white as that. For example, which is the more successful sales appointment – a customer who signs a fee agreement and makes an application (lets say for equity release) with the business completing and the adviser paid a procuration and advice fee but you never see or hear from the client again (either directly or indirectly)? Or the customer who does not proceed with an application and does not pay a fee but over the next 18 months refers three friends to you (two of which complete applications and pay you fees)?

I’ve written at length before on my view that the sales process often starts years before you meet the client and may never actually finish during an adviser’s working lifetime.

My challenge to advisers is therefore to seek to continually improve their sales process and use measures which focus on overall profitability not just whether a client ‘signs-up’. For instance, in equity release it’s not uncommon for clients to change their mind and not proceed after initially agreeing to make an application for a scheme. Could something have been done differently at point-of-sale or as part of the after-sales process that would have stopped that client changing their mind?

Dave Brailsford, the British Cycling performance director, introduced a philosophy into the record-winning GB Olympic team, which was ‘The aggregation of marginal gains’. What he means by this is that if you make a number of very small changes the net effect of these improvements added together is significant.

So, advisers in return for slightly changing three or four elements of their standard process when dealing with clients could mean they are paid for one more case over the course of a year. Similarly, some customers agree to do business when in fact they are not 100% comfortable with the information they have been given (or, dare I say it the adviser themselves). Yet, the paradox is they’re too nice to tell the adviser to their face or to switch adviser but they ultimately give the ‘no vote’ by not referring the adviser to their peers or at worst telling their friends how poor the service was. But the adviser got paid so the service must have been good and therefore there’s no need to change anything. It can be a grey area for advisers however this is one area where ‘big picture’ decisions ultimately provide the real benefit.

The clouding of such matters in an adviser’s mind can become even greater, particularly in equity release, when we consider such questions as whether a reliance on one product or a ‘favourite’ product provider is impacting on their overall business performance? In equity release, what about those customers who were recommended lifetime mortgages over reversions in the early noughties and now, because of falling house prices, can’t take a further release? It is highly unlikely that these clients will be referring the original adviser to their friends and yet there was a choice at the time for a product that would have avoided their current predicament – a home reversion plan. Unfortunately, a typical adviser response to this is, “But the client bought the product so it must have been the right thing.”” Not the case at all.