How do you start active management when you already have a lot of clients?

When you manage a sizable existing client portfolio, it can be difficult to provide effective advice while keeping your clients happy and complying with applicable laws and regulations. Smart advice can play a crucial role here. In this article, we explain how to implement smart advice within your organization in six steps. We cover the main challenges and give practical tips on how to address them.

A new mortgage customer also goes through this cycle in this order: first there is an orientation to the options. Once the customer has a house in mind, concrete data can be entered. During entry, the mortgage application is already pre-validated. As a result, you identify incorrect data entry or conditions that have been overlooked. Then the customer receives advice. During the compilation of the advice, the advisor is helped with, for example, calculations, suggestions for in-depth questions and warnings. After the mortgage file has been completed and the deed has been executed, the management phase follows and the fulfillment of the duty of care. In this, a smart system monitors the customer's financial situation and alerts the customer or advisor in case of a possible need for advice.

Challenges with an Existing Client Portfolio

With a new office, it goes without saying that setting up automation takes place in that order. But when there are already a lot of client files and a lot of advice already given, you encounter a few additional challenges.

1. The company chose particular software..

Existing organizations, especially larger organizations, already have an “IT landscape”: a set of programs being used. Think advice programs, client portals, a Web site, a database, a CRM system, a policy administration system, e-mail programs and perhaps a business what's app program. For the smart advice cycle, work toward an IT structure that best supports that. You'll read more about it in this article.

2. Data is fragmented

Within the smart advisory cycle, data is your biggest asset. Data is scattered across multiple systems and must be consolidated to get a complete picture. It is still common that some of the information is hidden in paper files that have not been digitized.

3. The data is outdated or contaminated

Outdated or contaminated data is perhaps one of the biggest problems with existing portfolios. Clients do not communicate their changed situation. Advisors do not have regular contact with the client. And even if the client's circumstances have not really changed, just the passage of time has a big impact: bank balances change, the home becomes worth more, the mortgage is paid off in part, investments develop, salaries are indexed.

4. The data volume is large

Managing large volumes of data can be complex and time-consuming. The more mature the portfolio, the greater the volume of maintenance tasks. The capacity to actually do that maintenance is not always there. The revenue model to pay for thorough maintenance often isn't either.

Therefore, when implementing smart advice for an existing portfolio, you start with the customer data.

Data consolidation

Customer needs can be estimated based on customer data. You can then think about insurance that fits the risk a person faces, as well as matching the investment portfolio to a person's age. Start by bringing all the fragmented data together.

Consolidate all the customer data you have. In most cases, there is at least an advice tool and a CRM system, but other systems often contain parts of the information as well. API tooling like Rulecube can bring all the data together without disrupting your ongoing business. Smart technology with AI allows you to read unstructured data in documents and add it to your database.

As you consolidate data, make sure you

• Protect the source of truth. Often, both advisory and CRM tools have similar fields. Decide which is likely to be the most current, the Single Point of Truth. Determine where data should be updated or make sure your central database can recognize which information is most recent.
• Create a dynamic consolidated database so your information is always up-to-date. One-time data dumps merely shift the problem. So get API tools in place that can handle large volumes as well. Then you can always depend on your database.

By setting this up properly, you have already set up a large part of your IT architecture.

Data enrichment

Make your data more up-to-date and complete by connecting data and performing calculations. This can be done, for example, by integrating data from external sources or by combining internal data. By using historical returns on investments, you can estimate what the balance is in an investment account. By consulting external data sources on sales values in the region, you can estimate what the value of a property is now. And with calculations you can estimate what part of the mortgage has now been paid off.

When enriching data, make sure you

• have a clear reference to the source of the information.
• are clear to your client and your advisor that a data field is estimated. Adding the word “approximately” already works wonders. But a link “how did we calculate this amount” to an explanation box, for example, is also a possibility.

Data correction

You now have a consolidated database. And you've enriched your data so that your information is a little less outdated. But people live their lives. They move in together, they break up, they have children, people pass away and children move out. They buy and sell cars, motorcycles, caravans, boats, houses, businesses. They develop new hobbies like motorcycling or mountain climbing without informing their insurance advisor. So over time, it is important to check that your information is still correct. Use the following tips to do so:

1. The best source for current data is your customer.

Put your customer to work on cleaning up the data himself. Make sure you have a customer environment in which you can use simple forms to ask your customer to update the data.

2. Start super-small.

Don't immediately ask your client to check all the data. No one is hungry for hours of paperwork. Keep your request super-small. For example, ask if their phone number is still correct. Or their address. By keeping the question very small, your customer is more likely to answer. We think you live at Brink 5 in Hometown. Is that address still correct?

3. Use Nudging.

Use nudging techniques to motivate and reward your customer. An important nudging technique is also to make things very easy. So start updating the “no-brainers”: things the customer knows by heart.

4. Make your forms interactive.

With interactive forms you make sure you get the right relevant information from your customer and that you can reward your customer with new information. For example, a calculated outcome on whether the top-up on the mortgage can already be cancelled.

5. Give before you ask.

Haven't spoken to your client in ages? It helps if you bring something to the table first instead of coming to get something right away. Because by asking your client to make the effort to update data, you are asking for their time, their attention and their energy. Give a gift first. So don't say “among the entrants we will raffle off a 25 euro gift certificate. That's not a gift, that's an uncertain reward. Give them something with no quid pro quo. These days, you'd rather not give away plastic junk, but an eco-friendly giveaway or a digital gift will do.

Define your advisory framework

You now have a complete, up-to-date, corrected database. Because of the customer interactions that have arisen from your cleanup, you're also going to start seeing advice calls appear in your calendar. At this stage, it's a good idea to develop a digital version of your advice framework.

What is an advice framework?

The advisory framework is the set of predetermined ground rules, criteria and standards that each case must meet. In part, those rules are determined by laws and regulations. In part by the acceptance criteria of banks, lenders and insurers. And in part by your standards and values as an advisor and organization. Advisory frameworks change regularly. Still, you would prefer that everyone in your organization gives careful and correct advice. So you want to somehow secure your advice framework. That has challenges. Many companies have a document or internal wiki page where changes to the advice framework are shared. But updates to the work instruction are not read, and advisors often use their own process. Rigid workflows, in turn, make advice impersonal. How do you ensure that every client gets the quality advice your brand stands for? To do that, you build a dynamic advice framework. That helps your advisor make the right choices, but doesn't lead to frustration. You can read more about how to build an advice framework here.

Two types of rules

An advisory framework consists largely of rules. As you develop your advice framework, you'll encounter two types of rules:

1. Rules that are only relevant at the time of advising. Think of standards about income in relation to the amount of mortgage to be applied for. Your client must meet these at the time of advising, and the perspective must be right. If the client starts looking for a new job with a different ratio of overtime to fixed income the day after the deed is executed, that is not necessarily a reason to set off alarm bells.
2. Rules that must be monitored on an ongoing basis. For example, consider standards about the ratio of home value to mortgage amount. If the value of the home is much higher than the mortgage after a few years, you may want to take that to the lender.

Your advice framework includes all of these rules.

Guided advice

Using your digital advice framework to assist and support your advisor is called Guided advice. You can read a few more best practices for guided advice here. By getting started with Guided advice, you will test and improve your advice framework.

The Type 2 rules are the ones you want to include in your active client management.

Introduce active client management.

You collected almost all the rules you need for your active client management in step 4. You still want to enrich those with some rules:

• Moments in the customer's life that are advice-sensitive. Think marriage, cohabitation, divorce, having children, a new job, children turning 18.
• Moments in the client's life that require personal attention. It depends heavily on your own values, your brand identity and your style of communication. Do you want to send a birthday card or a birthday push message? Do you send a card or printed onesie when a baby is born or do you visit in person? Thus, there are countless opportunities to strengthen your customer relationship.
• Things to do with the product lifecycle. Think about end dates of fixed-interest periods, offensive investment portfolios that have to be adjusted in the run-up to an end date, and all-risk insurance covers that can expire.

All in all, you then have a hefty list of rules. Your advisory framework has already been tested and proven in practice. And you can now unleash it on a complete, cleaned and updated database.

You'll read more about how to implement active client management in this article. In that article you can also read how to make sure that all those notifications about your existing customer portfolio remain somewhat manageable. For this you also download a handy canvas for free. The article is summarized in this infographic.

To make sure you don't disrupt your organization, make sure to read this article on taking a tiered approach when launching active client management.  

Pre-validation

Within advice, your advice framework has already been tested. You can start using an advice framework, once tested, at an earlier stage of your advice cycle. This allows you to get ahead of problems faster. In developing your advice framework, you may have chosen not to include all of the underwriting criteria of banks and insurers in your framework. At this stage, you can expand your advisory framework to include specific rules from financial product providers. This way, even before you apply for a financial product, you test whether the application fulfills the set requirements: pre-validation.

With Rulecube you can...

• Build the APIs to create a consolidated database.
• Enrich the database with external sources and calculations
• Build all the decision rules you need for your advisory framework, your active management and your pre-validation
• Link your workflows and actions to the outcomes of those rules
• Build smart forms that you can use on your website for your customer to fill out

For help with the practical implementation of these steps, we are here for you. Schedule an introduction today using the button below.