Ongoing Valuation Monitoring and Management

I was speaking to a potential client earlier this week about their use of IO and portal. They are using the portal to securely message clients and they’ve had great feedback and engagement, but their concern was that they didn’t know what data was up to date on the plans and if the valuations were correct, and how the valuations worked (which ones did and which ones didn’t) so that they could comfortably give the client access to view their portfolio details.? Does that sound familiar?? It’s a lot to get your head around and with everything else going on.

When my client started really thinking about that data, it caused them a massive headache.? So, they spoke to their team. The team could answer that there were bulk valuations in place and some were monitored. There were contract enquiries and electronic valuations but the problem was that nobody really knew the extent of the problem.? This is not “news” to me; it’s something I’m hearing about more and more.

Valuations in your CRM and back-office systems plays a fundamental part in what you do.? Not only do they feed into your fees, it’s the part that your clients are most interested in hearing about, along with the advice you give them and the financial planning that you put into place for them.? So, knowing the parameters of that data is hugely important!? Has it been checked?? If so, when was it checked?? If it falls down – how does it get flagged so you have that reassurance you need to still be able to give that data to clients?!

OK – you’re on it but where do you start?

I think that part of the problem with most of the systems is the terminology used and how to interpret the data.? It’s all quite confusing! Let’s break it down for you.

In essence there are three types of valuation in this industry.?

Bulk Valuations

This is where the data is pushed from a provider into your back-office system.? It brings all the data that provider has on your clients and plans and tries to match it to something in your system, updating the plan value, the fund holdings and sometimes contribution/ withdrawal data and other further information.?

The nice thing about this type of link is that it will generally tell you if it cannot find a plan so this allows you to run a simple report. From that, you can rectify some simple issues so that you know all your data has been uploaded.

A handy tip to be aware of on this is that not all plan providers will actually update when the plan goes to ￡0 or out of force and so if you don’t have a robust process in place to put a plan out of force then, depending on the provider and back-office system, it may not do it for you.? You do need a method and we’ll talk about that later on.

Scheduled Valuations

The second method is contract enquiry, also known as scheduled valuations or contract enquiry.? The idea of this is it allows you to pull a request for a valuation from a provider. ?This can be done on a case-by-case basis, so one client one plan or most of the systems will automate this in the background for you.? Remember, you don’t get to pick which providers use which types of these scheduled valuations. ?Unfortunately, that is down to the provider and the integration they have with the back-office system on the scheduled valuations. They work in different ways and it’s really important that you establish how yours work in relation to the advisers, the providers, the plans and set that up accordingly.

Manual Valuations

The third method is manual valuations. Now there are some providers that cannot provide any electronic valuation. ?Some of these may be able to provide a file with plan values and data, with potential to upload into your back-office system. ?You can schedule to do this once a week, once a month or once a quarter. ?Some don’t even have that capability and so then it is a case of looking at what is the minimum amount of time for clients that you want this plan to value? ?Most of the firms we work with will say quarterly or monthly and in this situation it is simply a case of setting up a process that recurs manually to alert one of the admin team or the person in-charge that they need to put a manual valuation onto that client. This task can seem really large when you’re looking at your entire database.

In relation to the bulk feeds, they tend to be more platform based so these are generally the clients that you have an ongoing fee arrangement with.? Usually these would be active clients.?

When you move down to the remainder of your data on scheduled valuations, these may not be clients you’re contracted to service.? Here it’s about actually pulling out your data to understand who your active clients are that you want to give access to this data.

Clients that you are actively engaged with and have a contract with and then what plans do they have that are not valuing (there are generally reports that are built in the system or can be manipulated out of the system) to give you this information very easily. Then you have a targeted list of where to aim for.

Let’s link that back to the first part. If you do have a provider that has a bulk update but doesn’t do an update for closures, when you’re looking at a consolidated list of all those plans for all those clients that you want to value, you can simply apply a filter for, say two weeks. So if it’s not had a valuation for the past two weeks, you want to have a look at why and you can exclude the ones you’ve manually completed.

What this will show is that if you have a bulk provider (so a Transact or a Nucleus) and the planned valuation is out of date by a month (and you know that you are checking your bulk reports weekly and monthly) then actually that implies there’s a problem with the plan.

You can simply go online, check with the provider to see if it’s sold out or out of force and you can update the information.? This can seem like a really daunting project to start out with but actually it can be very easily systemised and broken into chunks. Within 4 to 6 weeks, it’s fixed, so you have complete awareness of your providers; how often they value, the processes you have in place to pick up issues, manual valuations set up so you know you can say to your clients these are the providers that will value daily, weekly, monthly or quarterly and you can have faith that you have the systems in place to monitor that.

We’ve worked with a number of firms to turn this into a short simple project; by the end they have complete visibility and control of their valuation data and time was spent on the right clients. Click here to book a free of charge consultation if you’d like to learn more.