Colouring the planning experience

Three years ago, a former funds management executive, Darren Shirlaw, identified a hole in the Australian business coaching market and set out to form a business coaching consultancy.

Today, Shirlaws is a national business providing assistance to businesses with structural and management issues. It has 45 staff and 200 clients on its books. Seventy of those clients are financial planning practices ranging in size from sole trader planners to dealer groups.

According to managing partner Darren Shirlaw, the central management issues found in financial planning practices include succession planning, leveraging the business, employing the right staff, building distribution relationships, equity arrangements, dealer group relationships management, and practice consolidation.

While the practice management issues affecting a particular planning group are dependent on specific details of the business, such as the size and target market, Shirlaw says there is one which affects a number of groups regardless of their make up.

“One of the main points is about getting the staff structure right. A lot of financial principals are stuck seeing clients on a day-to-day basis,” he says.

Freeing up the firm’s principal from the day-to-day activities of seeing clients, preparing plans, even organising other staff members, means the practice is able to focus on activities that will increase revenue for the business, an important growth focus for any planning firm.

Staff structure and productivity was one of the issues facing Treacher & Associates principal David Treacher within his Gold Coast-based firm.

“The key problem was my inability to delegate, and I expect most financial planners would be like this. I think it is because in the early days, you tend to do everything,” he says.

So in 1999, Treacher began two years of business coaching with Shirlaws, leading to the expansion of nine staff and the implementation of a job segmentation exercise, which Shirlaw calls ‘functionality’.

“It’s about getting the right people to do the right job,” Shirlaw says.

Shirlaws functionality exercise involves breaking up the different divisions within a practice to establish the levels of efficiency. Back-office work, interviewing and plan construction, as well as relationship networking/distribution building are split into three colour zones — red, blue and black.

“When we go into a practice, we initially find they have got a lot of red and blue being done, but not a lot of black. So it’s about switching the resources around,” Shirlaw says.

As a result of implementing Shirlaws functionality exercise, Treacher says his work day now involves no red (back-office work) and very little blue (interviewing and plan construction), giving him the time to concentrate on expanding distribution outlets, as well as raising his profile (the black zone).

Also as an outcome of Shirlaws’ business coaching, Treacher appointed an operations manager to the business 12 months ago.

“I realised as a financial planner, I was an absolutely hopeless business administrator. And I realised I was wasting more money than it was worth, trying to be both a business manager and a financial planner,” Treacher says.

In the Treacher business structure, staff now have distinct job descriptions, as well as policy and procedure manuals for their positions. In addition, all staff report to the operations manager who also acts as the human resources facility for the business.

Clarke-Moore & Associates is another practice utilising Shirlaws’ functionality exercise, practice principal Lee Clarke says.

The group’s red and blue teams are overseen by Clarke, but he says they ultimately take responsibility for themselves and hold regular meetings where they organise, delegate and take accountability for individual work.

Some of the practice management issues identified by this regional based practice of eight include determining the value proposition for clients and making the choice about customer segmentation. For example, whether to establish a private client division for its more valuable clients.

Clarke says the business’s six months coaching with Shirlaws consultancy has been instrumental to its future path and establishing its business direction.

Another practice management issue specifically related to this regional group is the difficulty experienced in attracting high quality young people to the team.

According to Clarke, the practice management solution to this problem is to build the business and build the brand.

“We don’t have the casts of thousands that you do in metropolitan areas. At the moment, we are in the process of building a brand so people will hear of and know us,” Clarke says.

Treacher agrees the recruitment of good people is one of the keys to a successful business.

“The hardest task is to find quality staff who can stay for as long as you want them to,” Treacher says.

While Treacher & Associates has set up an operations manager into its expanded business with success, the strategy is dependent on such things as the type of business, its size and market, and perhaps most importantly, timing.

Clarke-Moore & Associates has learnt this from experience. The group implemented a practice manager to the business last year, but due to a number of circumstances, it did not turn out to be a good business fit for the practice. One of the problems was that the person recruited was not a good personality fit for the practice, Clarke says.

However, Clarke is willing to try again and says after a recent restructure and upskilling phase the group is currently in, the business will be ready in about two years.

“You need to put time and effort into the selection process. Our experience last year has taught us that. Next time the integration of a practice manager will fall into place,” he says.