This week I had the pleasure of catching-up with Warren Shute, the founder and Managing Director of Lexington Wealth Management. Warren and I used to work together when I ran my marketing business for financial advisers. In fact, we helped him to refine and articulate his client service proposition.

In this article, I will share Warren’s strategy for dealing with clients who have less complex needs or smaller portfolio values. As you may well know, we have a real passion for all things digital at DISCUS, so upon hearing of the new Lexo service I couldn’t resist writing about it.

The key to business success: unwavering focus

Whenever I catch-up with Warren we always tend to discuss business strategy, changes in the advisory market and best practice ideas from across the world. Warren is an avid learner and in all the time I have known him he has remained focused on building a better business. Indeed, whenever we meet I’m delighted to hear how his practice has evolved.

Over the years, I have met with hundreds of financial advisers in the UK and abroad and I firmly believe that the key to success – no matter how small or large the business – is an unwavering focus on attracting, engaging and servicing ‘ideal’ clients.

That may sound altruistic, even a bit cheesy, but it’s true. As soon as you create a service proposition for your ideal clients and then refuse to deviate from it, you create momentum. Like attracts like and over time the word will spread, then soon you will become known as the ‘go to’ adviser for your chosen segment.

The advisers I know who have followed this approach, while they may have found it difficult at times turning away business from non-ideal clients, are now reaping the rewards. They have a business that they love, filled with engaged clients who they enjoy working with and who are happy to pay their annual servicing fee.

The challenge: how do you get there?

The biggest challenge in adopting this approach is the fact that – and this goes against the mind-set of a financial planner who chose this path because of a desire to help people and change lives – you will need to turn people away.

People who could benefit from your service. Those who, if you look at it objectively, are not the right ‘fit’ and will ultimately end-up costing you in time and resource to service. Clients that will distract you from focusing on higher value initiatives that can have a real impact.

The Lexington solution

Like all good financial planning firms Lexington receives a healthy number of new enquiries each month, resulting from their marketing activity or via referrals from clients and other introducers. Unfortunately, some of these enquiries are from people who don’t quite fit with the Lexington service proposition. Most often because their affairs are not sufficiently complex to warrant a full financial planning service.

A few years ago, Warren wanted to find a solution to ensure these clients had access to a service that would meet their needs – without a heavy reliance on him for ongoing service.

One option would have been to refer these clients to another adviser, perhaps someone just starting out and looking to build their client bank. This is an approach I’ve seen quite often and I’ve helped numerous advisory firms to undertake due diligence on other advisers to do just that.

The other option was to build an entirely new service. A light-touch, digitally enabled proposition that would work for these smaller clients. As you can imagine, this approach would take a lot longer to build and develop and at significantly greater cost.

Warren elected to take the hard road and just a few years down the road Lexington now has a little sister: Lexo.

Lexo is an online, self-service proposition for clients with smaller portfolio values (the minimum investment is £20,000) and less complex financial needs. Those clients who don’t necessarily need a long-term financial plan, although would like a safe ‘home’ for their investments.

I asked Warren a few questions about his journey to bring this service to market. Here are his five key learns:

1. Lexo’s ideal client is not who we thought it would be. When scoping out the service Warren thought it would be best suited to high-earning individuals aged 30+ who are incredibly busy and want to self-service. Instead, those signed-up to the platform tend to be those aged in their fifties who don’t feel the need to engage with a financial adviser.

2. Grossly underestimating how difficult the project would be to deliver. Finding a website developer to deliver the right look and feel, with an understanding of financial services was a challenge. Every item of content also had to be built from scratch, along with the client journey and automated emails to support the process. The project took, from initial concept to launch, about 2.5 years to deliver.

3. Content marketing can be a full-time job. Creating content and feeding a content marketing machine to drive awareness is time consuming. Using CPP (Cost Per Click) campaigns can also be expensive in our profession.

4. Clients still want to talk with a real person. The Lexo brand is unknown and given the number of scam websites out there almost every client places a call to ensure the company behind Lexo, Lexington Wealth Management, is a real business, manned by real people.

5. Promoting the service is all about education. Every week Warren publishes a video which he pushes out on social media. These videos are educational and help prospective clients to understand the proposition, while at the same time come to know Warren, his approach and everything he stands for.

Based on feedback from advisers with the same investment ethos, Warren has opened the service up to advisers looking for a ‘home’ for their lower value clients. This offers the opportunity for Lexo to grow even faster and ensures the referring advisers can remain focused on their core business.

Will Robo ever replace face to face advice?

As our discussion drew to a close I asked Warren whether he ever thought ‘Robo’ would replace the need for face to face to advice.

In his view, there are certain transactions best suited to ‘Robo’ such as investing your annual ISA allowance. However, at some point – and the threshold will be different for everyone – you will want to pick up the phone and speak with a financial professional who can assure you that you are making the right decision – before you hit the ‘buy’ button. In some cases the threshold might be £30k and at the other end of the spectrum it could be £150 or £200k.

At the end of the day Robo-Advice won’t replace financial planning. There will always be room for both.

We couldn’t agree more.


This post was created for the DISCUS website based on a case study created with Warren Shute of Lexington Wealth Management. Embark are also launching a platform to help advisers to service their lower portfolio value clients, find out more or register to attend an upcoming event ›