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The role of the practice manager in financial planning – Tracey Underwood, PACE Solutions

  • By Sue Whitbread

Is your financial planning business running as efficiently and effectively as possible? Is your work/life balance a thing of envy or a thing of the past? Tracey Underwood of PACE Solutions considers how using a practice manager can not only transform the success of your business but also help you to lead a more fulfilled and happy life into the bargain

Does the following scenario sound a bit familiar to you? You start the day with good intentions; you have a review meeting with one of your most influential clients and the afternoon is free to write up your file note and review your business plan.  However, when you arrive at the office you find yourself interrupted with requests from various members of the team, a phone call from your compliance provider, an invoice that needs querying and one of your team wants to discuss with you what exam they should take next.  In my experience, this is a common occurrence within businesses.  Events will often overtake the best of intentions with the result that the principal becomes embroiled in spontaneous day to day management issues when they had other tasks scheduled. Time management becomes increasingly more difficult.

As a result of trying to juggle so many different roles across the business, the quality of service and advice can suffer – as can overall business success.  In an attempt to address the issue, the principal will usually end up working longer hours. Pressure is also added onto the existing support staff.  Work/life balance becomes a thing of the past and there appears to be no end in sight to this ongoing cycle.  Everyone seems to be working flat out but there’s no time to take on more work or plan for the future.  I refer to this as the ‘hamster wheel’ effect. There comes a point when this is holding the business back – and steps need to be taken to change things for the future or damaging consequences will result.

How to get off the ‘hamster wheel’

Understanding the capacity of your business makes planning easier – as does realising that you are on the ‘wheel’ in the first place.  In my recent IFA Magazine regarding the recruitment process, I described how firms should conduct a gap and cost analysis outlining all the roles and activities that are required to operate the business.  The analysis may have concluded that some of the roles can be outsourced or there is a recruitment need.  The recruitment need may suggest that the business requires the services of an operations or the more recently termed, practice manager. This could be the way you get off the ‘hamster wheel’ and all it entails.

What is a practice manager?

This person is fundamental in assisting the principal, allowing them to concentrate on their client-facing and strategic planning roles.  The practice manager will divert work away from the principal, either dealing with this directly or delegating throughout the business.  The key is that the practice manager takes full responsibility for all operational roles within the business, only referring back to the principal if it’s business critical.

Crucially, the practice manager should have the necessary skills to implement from a ‘hands on’ level that the principal will not necessarily possess.  Recruiting someone with a ‘hands on’ operational background will prove much more effective to the business and is likely to gain greater buy in from the support staff than if the principal tried to do this.  A practice manager is neither an administrator, personal assistant nor office manager.  This person will hold a strategic position within the business and needs to have the relevant operational and industry experience; although the latter is not always a requisite.

Hiring a practice manager requires commitment. Some typical questions that need to be answered by the principal are ‘can I let go and let someone else make the bigger decisions?’; ‘how much more revenue could I generate if someone else was doing the job instead of me?’  Trust is key for an effective relationship between practice manager and principal.  However, hiring a practice manager does not mean giving up total control. Their involvement can be as little or as much as the principal dictates although a clear remit should be given to maximise efficiency and effectiveness.

What can a practice manager do?

To get the most out of this role the practice manager would be involved in:

  1. Implementation and ongoing monitoring of the client service proposition

At a strategic level, the principal may decide on what services are to be offered to which clients but someone will have to implement the offering and ensure that advisers and support staff understand the process.  This is a role for the practice manager; they will implement the service proposition into your client management system, create the client-facing documents (or liaise with the external marketing company) and implement the processes needed to support your client service proposition.  The business may well get outside help to put this together but critically someone has to implement it to maintain effectiveness.

  1. Process implementation

If the business is to remain profitable and boost overall success, it needs to have efficient systems and processes in place. It will be the role of the practice manager to implement these.  They will need to work with the staff to map out, train and implement the internal processes.  The processes will also need to be reviewed and changes implemented where necessary.

  1. Management of the support team

This would include day to day management of workflow either through the paraplanning and administration manager or directly with the team (this will depend on the size of your business).

  1. HR

Many financial planning businesses will not have the resources to hire a full time HR manager.  The practice manager would be involved in implementing, reviewing and conducting the following:

  • Staff appraisals
  • Recruitment (implementing the process outlined in my recent article)
  • Staff training & development plans
  • Key Performance Indicators (KPIs). In this regard I am not referring to compliance KPIs but indicators that are much more in line with the business objectives, particularly with regard to the service proposition.  For example, are existing client reviews being completed?  If not why not?  What are new client levels, who are the key introducers, which clients are leaving and why?  This management information will be useful in making strategic business decisions.
  1. Financial management

 Whilst the practice manager would not be involved in the day to day financial management, they may need to be involved in budgets, checking invoices and financial forecasting.

  1. Managing outsourced relationships

The business also needs to recognise that some of the current roles within the firm may be undertaken more effectively if outsourced.  This could include compliance, IT, HR, even paraplanning and it would be the practice manager’s role to manage these relationships, ensure terms and conditions are in place, review pricing and checking invoicing.

  1. Compliance

If there is no dedicated internal compliance department, the practice manager may be involved either directly or through the outsourced relationship.

How much do I pay for a practice manager?

The remuneration package you will need to offer in order to attract the right person will vary regionally and will also depend on the experience and qualifications of the individual you appoint.  I must just add in here that it doesn’t necessarily dictate that a practice manager has to have professional financial planning qualifications although this will help them understand industry issues.

Starting salaries can be from £35,000 but can be significantly higher depending upon the size of the business and the level of responsibility delegated to the practice manager.  Of course, outsourced practice manager services can be used either on an interim basis until a practice manager is recruited or on a permanent basis if the needs of the business do not require a full time practice manager.

Whichever route you decide to take, by making the decision to get vital support in running the business you’ll have made a big step towards improving its overall efficiency and streamlining future success. As well as allowing you the scope to focus your time and attention on those areas which are of most high value to the business, the chances are you’ll find that alongside greater success you will probably enjoy your work more, feel greater satisfaction and fulfilment and have a much improved work/life balance too.  Good luck!

About Tracey Underwood

 Tracey is the owner and founder of PACE Solutions.  The business provides support for financial planning firms by focusing on operational practices including; recruitment, compliance, processes, client proposition and business strategy.  This is achieved not only through a consultancy process but by hands on implementation to ensure that firms achieve effective results that would otherwise not be achieved through consultation only.

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