Gareth Jakeman, principal consultant of Praescius Financial Consultants, faced an enviable predicament 18 months ago: the business had grown so quickly and successfully, it had reached capacity.
In a few short years it had transformed from a one-man practice to one of Godfrey Pembroke’s top four practices, employing eight people and servicing 450 clients via its headquarters in Darwin and a further practice in upmarket Chatswood, NSW, where the business began.
“It’s a cliché, but 18 months ago we were, in a sense, victims of our own success,” Jakeman says. “Our practices were working extremely well but we couldn’t take on more clients. We had reached a point where we just couldn’t grow any further. That was a concern, but there was an even greater concern, I didn’t want the business to regress, to go backwards because we were at capacity.”
Another driver was legislative change. “Our licensee, Godfrey Pembroke, is an industry leader in the change to the fee-for-advice model. They announced this move back in 2006, well before current day motivation across the industry,” Jakeman says. “Praescius shared the same philosophy and started out as fee-for-service in 2004 – but we also knew that the potential of a legislated fee for advice, and possibly the level of fee, meant we really had to improve our administration.”
Efficiency improvement identified
Jakeman and his business partner, Matthew Harrington, saw that they had one of two options: increase staff levels or improve efficiency.
The first option didn’t appeal. “Increasing staff levels would have meant adding in another layer of management and that’s something I didn’t think our business was ready for,” Jakeman says.
So it came down to increasing efficiency – reducing the amount of manual work done by the staff in order to increase their capacity. The question was how?
Praescius had been using XPLAN for some time, but Jakeman was aware that it wasn’t being used to its fullest potential.
“It was our own fault,” he admits. “It’s another cliché, but sometimes you get so busy working in the business you don’t have time to work on the business. XPLAN is detailed and capable of doing a lot of things. You don’t need to have high level IT skills to use it, but you do have to put some time into it to get the most out of it.”
So he called on IRESS’ Senior Business Development Executive, Michael Kinens, to discuss where the business was, where it was going, the pressures it was facing and how to better use XPLAN technology.
“This discussion resulted in us going back to first principles and working out what it is that we do in financial planning and what inputs go into providing service to our clients,” Jakeman says.
He and his team quickly realised, Praescius had far too much invested in manual processes and expensive fixtures that were not necessary. Most if not all of these could be systemised or automated by employing XPLAN.
“IRESS helped us realise that one of the advantages of using XPLAN is that it is capable of storing our data on their server,” Jakeman says, “so we were able to get rid of our own server which was costing us upward from $20,000 every four to five years, plus a further $15,000 to $20,000 per annum in IT maintenance for our two locations.”
But it was not just the direct cost saving which made using XPLAN such an attractive option.
“Being headquartered in Darwin we experience first-hand the pain of irregular power and outages,” Jakeman says. “As a result, retention of data can be an issue. We also have the NSW office and with clients all over Australia and internationally, it’s a mobile business. Storing our data with IRESS means we have reliable data retention.”
The conversation with IRESS also helped Praescius map strategies to address three major problem areas:
- Competition from industry funds
- Time required to construct advice documents
- The quality of the data coming in.
“Together we developed a template which mapped where we needed to go,” Jakeman says. The experience, which took about six months, resulted (amongst many other things) in introducing scanning technology where XPLAN barcoded all Praescius documentation, so that any material generated and received was automatically captured.
The business quickly transformed from being very labour intensive, where a lot of staff time was spent manually entering data, to a highly effective business which captured data with the scan of a barcode.
“It meant our staff were released from many time-consuming administrative chores and could devote more time to client relationships,” says Jakeman. “The process is constantly evolving and at times it is challenging for our staff, but the results are worth it.”
Without commitment from Praescius and the assistance of our partners, Jakeman says it is unlikely the business would have been able to grow. “Of course, this process took time and money, but the direct cost savings plus efficiencies mean we are ahead.”
Jakeman also believes the work done to improving systems and processes is what tipped the scales in Praescius’ favour in the Godfrey Pembroke Practice of the Year Awards, a national award which recognises the commitment of the business principals and staff to continually develop and grow a high quality financial advice business.
“Winning the award was recognition from our licensee, amongst other things, of the hard work we had done in automating our business,” Jakeman says. “In his speech, Tom Reddacliff, Godfrey Pembroke’s managing director said as advisers we often have to lead the licensee.”
At the awards ceremony, Reddacliff said, “Praescius has exhibited great leadership and innovation... This means the Darwin community has access to a firm at the leading edge nationally. They have also invested a tremendous amount in the systems and processes required to give excellent client service.”
Today, Praescius has more motivated and savvy staff, who are less stressed and better positioned to engage with clients. “Our streamlined processes and efficient administration have resulted in a better experience for staff and a better experience for clients,” Jakeman says.
Importantly for the business, it now also has the capacity to grow. “Thanks to IRESS, we have the ability to increase our client base exponentially,” Jakeman says.