Client advisory groups

For Matrix Capital, the idea of establishing a Client Advisory Group emerged from a review undertaken of the business in 2008; about the time of the announcement of the Retail Distribution Review.

Gary, my business partner, and I had ambitions to transform our business and had developed a number of ideas on how to move it forward. We recognised that we needed external help in sense-checking our ideas and to develop them in a way that evolved our business and met our aspirations in a way that was totally aligned with the needs and aspirations of our clients.

We appointed a business consultant, Andrew Mason, who worked with us to do just that. What emerged was a new business model and client proposition that was both fit for purpose and effectively pre-empted all of the themes that underpinned the recently announced Retail Distribution Review.

A key part of Andrew’s work was to facilitate a focus group made up of clients, professional connections and people who weren’t clients but would fit the profile of ‘right fit’ clients. This proved to be one of the most significant steps we took as, for the first time, it provided frank and honest feedback on the way in which we had been engaging with clients.

It covered a whole range of issues and there were many ‘light-bulb’ moments.

The decisions that emerged from this process have had a profound and lasting impact upon our business model and our client proposition. Most significantly, when RDR was finalised, we exceeded by a long margin, all of the requirements of the new post-RDR world.
We also recognised the value in engaging directly with clients, professional connections and other interested parties when addressing issues within the business. So, this experience created the foundation of the idea of a client advisory group being used to bring objectivity and fresh thinking to issues of ongoing and emerging concern. If you work in the business, it’s sometimes difficult to work on the business in an effective and objective manner. A client advisory group (or board or forum, call it what you will) provides a great opportunity to do this.

The journey

The decision to form a Client Advisory Board wasn’t a new idea; there were other firms doing it. However, the examples that we looked at seemed to have an underlying intention of simply creating a group of well-connected people who would be advocates for the business and, to put it crudely, act as a source of referrals for the business. This wasn’t what we wanted.

What we learned

For our business, the idea of a formal Client Advisory Board didn’t really work in the way in which we intended and was short-lived. However, we did recognise that there was real value in engaging with clients, professional connections and other interested parties on key issues within the business; and the ability to tap into the wisdom and objectivity of people at the ‘receiving end’ (so to speak) of what we were delivering was hugely valuable to the business.

So, the idea evolved into a ‘Client Advisory Group’ that meets only when we have important issues that we want to address.

To illustrate this, the most recent group was formed to discuss our fee policy, including the specifics of the fees we charged and the way in which we charged them.

This was arranged as an informal lunchtime meeting in a private dining room in a local hotel. The attendees included clients and professional connections and was independently chaired by Andrew, the consultant we worked with back in 2008. The attendees were provided with a discussion paper in advance of the meeting that articulated the issues faced by the business on the matter at hand; and outlined our thoughts on how we might fine tune our overall fee charging policy.

What emerged was incredibly valuable; and resulted in us altering our fee charging policy to offer even greater transparency and choice, which we then incorporated into a new Client Agreement.

This has given us even greater confidence when talking to new prospective clients and other professionals that refer clients to us.

There were a number of questions and concerns that we had to address when establishing a ‘Client Advisory Board’ which included:

  1. What are we attempting to achieve?
  2. Who should be invited to join?
  3. What should the terms of reference be for the board?
  4. To what extent will we involve the board in internal matters?
  5. How do we ensure that client confidentiality it maintained?
  6. What are the risks of involving people outside of the business?
  1. How often should the board meet?
  2. Who should attend from the business?
  3. Where should the board meet and at what time of day?
  4. How do we maintain objectivity, frankness and candour within the group?
  5. Can we commit to investing the time over the long term?

This has given us even greater confidence when talking to new prospective clients and other professionals that refere clients to us.

Where are we now

To bring you up to date, Gary and I recognised the value in having Andrew more closely involved in the business. So, we took the decision to invite him to join us as a non-executive director to do two things:

Firstly, to act as that independent arbiter and to challenge Gary and I as the shareholding directors of the business. Secondly, to lead on strategic projects.

So, the result (so far) is that the concept of a Client Advisory Board has evolved over time into a non-executive director being appointed to the board with the ongoing facility of bringing together a range of individuals who, from time to time, are invited to bring their wisdom and objectivity to our thinking on how to develop the business in response to the many challenges and opportunities within our sector whilst continuing to and meet the ever changing needs of our clients