PROD and financial advice: Finishing the methodology

In the second piece of this series we looked at how clients can be split into sub-segments. Now, in this final piece, we look at completing the PROD process. Our suggested practical approach is iterative in nature and starts at the advice service level. It then loops through investment solutions and platforms. Each client's individual needs are considered continuously throughout the process.

At the outset we recommend that you include all the options, even the ones you have no intention of ever offering or even believe in. At a later stage, you can rule out any number of these options, which will provide valuable data for your PROD policy.

1. Start with the advice service level you already offer (for a lot of firms there is only one level of service offering). Now consider the different types of clients out there and assess if there are any other service levels you don't currently offer that a client could want?

2. Next move to all the different investment solutions you would be comfortable using with your clients. Now consider the different types of clients out there and assess if there are any other investment preferences you don't currently offer that a client could want?

3. Next move to all the different platforms you would be comfortable using with your clients. Now think about the different types of clients out there and assess if there are any other platform providers you don't currently offer that a client could want?

Go around the loop as many times as required to ensure you have sufficient service levels, investment solutions and platforms to cover the needs of any client you are likely to advise.

Next having drawn up this big grid of the various segments, put a cross through all the segments you don't want to cover. Then put a tick against the areas you might want to cover, even if you don't yet have a solution. Finally, (this is a good by-product of PROD) take the opportunity to have a ‘spring clean' of the investment solutions and platforms, where you have multiple options in the same segment.

Now you are in position to draw up your condensed PROD Map as well as noting any universal rules and exclusions. 

The PortfolioMetrix paper, free to download from the PortfolioMetrix website, includes two detailed case studies and offer practical examples of how to consider service levels, investment solutions and platforms to deliver the best outcome for your client. It also shows how you can map all your clients into a workable number of segments. Using these case studies will help you get a better idea of how to approach the process.