Systemizing Your Business:

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Systemizing Your Business Getting HNW Ready
Pierre McLean, Vice President National Sales
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Getting HNW Ready

• The HNW Opportunity
• Strong Benefits of Being Client-Centered
• 5 Strategies / 3 Building Blocks
• for Business Success
• Systemizing Your Business
• How To Get Started

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The HNW Opportunity A Growing Segment
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HNW A Growing Market in Canada
Number of HNW Individuals (Investable Assets
Greater than 1 M Canadian)
Households
Source Cap Gemini Ernst Young, 2002
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The HNW Opportunity
Over half the millionaires have less than 2 M
Canadian of investment-ready assets (excludes
primary home)
65
Affluent Canada
Canada (C)
Source Forresters Consumer Technographics 2002
North America Affluent Mail Study
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Are You Already There?
Managing Assets
11.2 Million
of Canadian Adults with Stock Ownership (Direct
or Through Funds)
Growth by Assets and Clients
Team Process Structure
Talking to Clients
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Five Strategies for Success

1. Focus on affluent private clients
2. Use the investment consulting process to
   differentiate yourself from competition
3. Manage your practice as a business
4. Partner effectively with institutions and other
   professionals
5. Commit to ongoing learning and execution

Source CEG Worldwide
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Everyday Advisor vs. HNW Advisor
The Everyday Advisor The HNW Advisor
Fragmented, inconsistent Focused, consistent
Extreme competition Low or no competition
Poor staffing situation Well functioning team
Works too hard, on the wrong stuff Work gives positive energy, rejuvenating
Works with low creativity Works with high creativity
Low HNW familiarity High HNW familiarity
Gives away too much for free Charges for experience
Low independence High independence
Business controls advisor Advisor controls business
Competes on price and product Competes on business process and solutions
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The Client Everyday Advisor vs. HNW Advisor
The Everyday Advisors Client The HNW Advisors Client
Low level of loyalty High level of loyalty
Drains staff time Worth staff time
Low level of commitment High level of commitment
Price shops Price no issue
Not a predictable future Very predictable future
Low level of response High level of response
Less fun, no challenge More fun, challenging issues
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Building Blocks to Success
Franchise Value
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Building Block Articulate
Creating distinct valueseparates you from the
crowd
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Value Diffusion Factor
Price-Performance of all transactions for a major
CDN brokerage firm
High Revenue Productivity
Value creation
Transactional
Recurring
Wrong direction - Right into the Trap
Low Revenue Productivity
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Systemizing Your Business
Delivering on the promises articulated in your
DVP.
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Engineering Your Practicefor Growth
Team Alignment
Segmentation
Client Service Scheduler
Client Service Process Planner
Client Service Matrix
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Engineering Your Practicefor Growth
BY WHOM
WHO
WHEN
HOW
WHAT
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Segmentation is the Start of Systemizing Your
Practice
Delivering on the promises articulated in your
DVP.
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Segmentation Guidelines

• AUM
• Commission or revenue
• Future potential (e.g. Income, inheritance, cross
  selling)
• Referrals provided in last 12 months
• Time required to service
• Personality (e.g. Difficult or easy to deal with)
• Part of a Key Target Group
• Centre of influence
• Candidate for fee based-business
• Related to a top client

Limit of 5 client relationship dimensions
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Segmentation Guidelines
Typical Breakdown Typical Breakdown Typical Breakdown Typical Breakdown
A Drivers top 2
A High Priority next 18
B Movers next 10
C Maintenance next 50
D Low Priority bottom 20
100
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Practice Capacity Worksheet
45
40
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21
945
19
50
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The Impact of Focusing on the Top End
Target Production Goal 2004
Current Production 2003
Difference
500,000
300,000
200,000
Revenue From Best Client
of new Clients Needed
15,000
13-14
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Revenue-Asset Diagnostic
Total
D
C
B
A
A
Segment
5 24 14 60 63 166
of Households
Assets (expressed as a of total assets)
High Recurring Revenue
Low Transactional Revenue
Total
Revenue (expressed as a of total revenue)
Total
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Developing Your Core Systems
Delivering on the promises articulated in your
DVP.
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The ICP Building the experience
Source Financial Advisor at the Epoch
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Client Service Matrix
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Client Service Matrix
? ? ? ? ? ? ? ? ? ?
? ? ? ? ? ? ? ? ? ? ? ? ? ?
? ? ? ? ? ? ? ? ? ? ? ?
? ? ?
22 19 12 8 8 5
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Building Your Entrepreneurial Team
Delivering on the promises articulated in your
DVP.
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Service Process Planner
Client Advisory Council 4x year
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Service Process Planner
Client Advisory Council 4x year
Book high-end location Private room Pat Invite/
Confirm 6 clients Team CA/COI Pat Send Agenda
and Materials to review (1 wk)
Cindy Facilitate Topics/ reviews
Pierre Follow-up letter on ideas raised
plans to execute Pierre/Cindy
-Forum for Top Clients to offer feedback -Gets
them involved -Improves our Services -Creates
Advocates
Pat admin/greeter Cindy Service Update Me -
presenter/ primary relationship
Reinforces beliefs in our process and in our Team
Thank You Gift Bottle of Ice Wine

• Metrics
• Progress Report

Focus group around business or market expertise
Show up - all prep looked after More strategic
relationship w CAs I want to evolve to Board of
Directors
Prep work
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Entrepreneurial Team Snapshot
Source Financial Advisor at the Epoch
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The Extended Team
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Value of Systemization

• Systemizing your business promotes your value as
  a HNW advisor!
• Focus on the HNW Opportunity
• Frees up your time
• Take control - dont be controlled
• Allows you to become more proactive

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How do I get started?
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Executable Tools to Help Your Practice

Distinct Value Proposition Why Diversify? Pre-Meeting Kit
Ideal Client Profile Volatile Markets Ideal Client Experience
Segmenting Client Base Asset Allocation Optimal Client Interview
Service Team Alignment Dollar Cost Averaging The Client Binder
Releasing Unprofitable Clients BestBuilt Loyalty Ladder
Investment Policy Statement GIC to Equity Getting Referrals
Practice Profitability Tax Class Funds Client Feedback
Fee-Based Model Guide to Retirement Emotions, Expectations, Economics
Reasons for Optimism
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Continuum of Investment Management Solutions
1,000,000
500,000
FRANKLIN TEMPLETON INVESTMENTS PRIVATE CLIENT
GROUP
250,000
100,000
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Questions

Answers
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Your Roadmap to Building A High Net Worth
Business
Pierre McLean, Vice President National Sales