Maximising productivity

Caroline Deutsch:

Hello, I'm Caroline Deutsch, the marketing director at SEI. Last year in 2023, we decided to conduct some research around productivity, recognising that this is a major challenge for CEOs and COOs in the wealth management sector. We commissioned Fox Red Consulting and Solve Consulting to help us to generate this research. So the research showed that on average wealth managers in the UK rank their productivity at six out of 10. What are the main reasons why you think this is so low?

Donald Reid: 

So six is obviously the average. If you look at some of the lower scores of let's say three or four that we heard from some firms, those are primarily firms, which in some cases have come together quite recently through consolidation and that does create complexity in the system and that's why some of those firms have got a lot of manual intervention and they have scored themselves low on productivity and they're going through that journey. The firms that score at the top end are firms that have been through that journey or have got very, very clear proposition, clear pricing, clear operating model, clear definition of client segmentation, and also have been very clear that there are going to be no exceptions to that. So really strong leadership in the front office and that has helped them score higher than some of their peers.

Gilly Green:

I think what is worth just noting is that actually the scores between front and back office were a little different. So back office actually scored a little higher as a seven, 7.5, a lot more straight through processing in the back office in the front office, which is a lot harder to scale. It was only five. So if you break that down and just understand what's going on there, I think there's a couple of things. Culture is definitely one of them, which we can talk about a bit later, but the relationship management model, how they face off to clients and how they structure the business behind the financial planners or relationship managers to be able to support that is important. And then also having the right conversations with clients. So one of the reasons people have these complex propositions or are providing bespoke portfolio management to lower-end clients is because they think it's what the client wants. They don't try and dissuade the client or offer the client alternatives with the reasons why it actually might be better for the client. In any case,

Caroline Deutsch: 

What surprised you most about the findings from the research? 

Donald Reid: 

This was a productivity review, and yet very few firms have got full end-to-end productivity KPIs in place. And in fact, it's less than 10% in our view of the firms have got the proper metrics in place that look at client-centric KPIs and those KPIs are then measured and reported to their exec or to their board meeting. 

Caroline Deutsch: 

Gilly, how about you?

Gilly Green: 

I think what surprised me most actually is how bad it is to say it is at the top of the list for the CEOs and between one and two for the COOs. This is an area that you would've thought people would do more about it, but despite having a range of different scores, most people were actually in the middle, which I don't think is a very good score to have five or six.

Caroline Deutsch: 

So Donald, across the sector there seems to be little consistency on how companies are measuring productivity. Is there an example you can give of a company that's doing this well and how are they're doing it?

Donald Reid: 

Yeah, there are a couple of companies that I think are doing it well, and one example that both of them are looking at is the elapsed time for end-to-end client on-boarding viewed in the eyes of a client. So if you think about it, a client meets their advisor and then signs up and then there's a period of time before the paperwork is completed and the accounts are opened and transfers land. Both those firms are looking at that elapsed time and looking at the average number of days for each part of the process and then working out how they can start to improve and shorten the number of days. But it's really important that it's been viewed from a client perspective. What's also important is that in one of those cases, the information goes to the board and the independent non-exec at one of those boards sits down with the COO on a regular basis to review the data, make sure that it's properly understood so that I-NED is able to challenge effectively at the board meeting. And I think that was really powerful when we heard that.

Caroline Deutsch 

Thank you Donald and Gilly for those insightful answers and for conducting this research. If you're interested to learn more, please download the research.