Fortitude Financial Planning, based in Northants, are a brilliant financial planning business. I use the word ‘business’ rather than ‘firm’ or ‘practice’ quite deliberately. Their approach, and the success they’re achieving, provide a great example to anyone trying to build a business that doesn’t lose its core values as it grows and becomes more successful.
As I’ve written about in my previous Moving Forward series, there are six core areas that businesses must have in good shape if they want to succeed. In fact, if you could be 80% good in each of these areas you’d have a fantastic business too.
The six areas (with links to my previous articles on each) are:
Let’s look at what Fortitude find success in each of these areas.
Like all the great financial planning businesses I know, culture and values are at the heart of the Fortitude story. They are very clear that clients come first, and they are also passionate believers in the Financial Planning approach.
It’s important to create a business culture by design; to know your core values and live by them. Culture shouldn’t get tacked on as an afterthought, it should be the core of who you are as a business.
This is true at Fortitude. Their core values are:
- Kaizen (constant business improvement)
In fact they have these core values on a feature wall that all staff and clients can see when they enter the office (see photo below). That’s a commitment to your values, and their strong culture is a key part of their success.
Fortitude have built a very strong team in all areas. The front office and back office work together well.
Recently they took on a new adviser to build depth and succession. Because they know who they are (Culture and Values) they were able to articulate this clearly in the recruitment and interviewing phase. Richard, the new adviser, took his time to evaluate the move before leaving his previous place of employment (as he should). In turn the Fortitude management team took their time in evaluating him for a values fit before making their offer. It was a considered two-way process.
The result? He’s working out brilliantly and recently wrote about his financial planning epiphany in a Fortitude blog, Last Week I Changed A Client’s Life.
The strong business values made the evaluation and hiring process a lot smoother. A lot of firms have had bad experiences hiring new advisers, and often it stems right back to a lack of clarity around their own values.
Although they are providing high-end, bespoke financial planning solutions for clients, the Fortitude team understand the value of strong processes. They recognise that strong processes create scalability, build consistency of client experience, and keep costs under control.
There are two aspects to building great processes:
- You create great processes by identifying people’s strengths and having them work to those strengths. You collaborate with your team when designing processes.
- You create great processes by mapping out ‘what’ (task), ‘who’ (job title), ‘how’ (tools) and ‘when’ (timeframes)
The Fortitude team encourage and remind each other to follow the processes, and highlight examples where doing so, or not doing so, led to a specific outcome.
It’s in the business management area that I believe Fortitude have excelled. As part of my consulting work I introduced the business planning process and weekly level 10 meeting process from Traction, by Gino Wickman. They’ve been one of my best adopters. So it’s no surprise, in just over a year together, they’ve also been one of my best performers as clients.
There are four members of the leadership team, Neil and Helen Bailey, Mark White, and Chris Bowmer. Are each of these people different personalities? Yes, they are. And the differences in each of them brings something unique to the business. Do they make their leadership team work effectively? Yes, they do. They function very well as a leadership team because of the processes they’ve all signed up to.
Mark is the full-time business manager, and they are at a size where this is an essential part of the team (about to break through £800k of turnover). Most firms I know leave it far too long to get a professional manager on board.
Fortitude keep their eye on their three key ratios:
- Profitability ratios
- Productivity ratios
- Client Selection ratios
These are the three key levers you can pull within your business to change performance and move toward success.
The last quarter of their financial year was a record. The first quarter of this year improved on that by 23%, setting another record. The foundations they’ve laid by making good business management decisions are now powering through in the results. It’s exciting to see.
In the last three quarters we’ve seen net profitability improving. Over the last two years it’s improved from single digits, moving up toward 20%. Their aim is to get to a net profit of 25% in the coming 12 months.
Productivity is also improving and it’s showing up in the ratios. Revenue per planner and revenue per staff are increasing strongly. This is a sign that not only are they doing more business, but they are getting more out of the resources they currently have in place. Headcount hasn’t risen much at all while the numbers have improved.
The third lever, client selection, is also moving upwards. The quality of the clients coming through the door is significantly higher than it was 12-18 months ago. You must know and understand your numbers monthly and quarterly. I know that running a business isn’t only about the numbers. There are many other areas to monitor that determine your overall success.
However, your numbers give you clues as to what’s working and what’s not. Any positive changes must eventually show up in the numbers and can act as confirmation of, or a challenge to, your current approach. That’s what we are witnessing at Fortitude. We’ve worked hard on all the other inputs and then tracked the results via the quarterly Management Information (MI).
The core focus here for Fortitude is on institutionalising their marketing processes. Building referrals from existing clients and professional introducers are very important to them.
They’ve recently established a client-advisory board to help them understand their business at a deeper level, and to try and work out ways to improve service delivery so that clients will be happy to refer in even greater numbers. Let me be clear, Fortitude already have a strong flow of referrals from existing clients, but they are always eager to learn more about their clients and to do even better in this area.
With the professional introducers, they have a close relationship with one of the leading legal firms in the region, and they work hard to provide outstanding service to them whenever a client is referred. Fortitude are focused and loyal in terms of this relationship. They don’t spread themselves too thin by chasing every professional services firm. They are working hard to build a deeper relationship with one of their key introducers, and it’s yielding dividends for both parties.
I love what the team at Fortitude are achieving and by focusing closely on these six key areas, they are have been able to transform their business performance. Hopefully their story will inspire others to put in the work they need to help their business grow and find success.
Feedback from Fortitude
Neil (Financial Planner and Director):
“The foundation of our business is a shared understanding of values, vision and mission. These are the Fortitude “why”. When faced with the inevitable challenges of running a business we can refer to them to help us make the right decisions.”
“While we know what we want to achieve, we don’t always know how. Brett provides insight and encouragement. He has helped us to develop tools and processes which we use to manage the business more effectively. We have become much better at prioritising issues, making decisions and implementing those decisions in a timely way. Brett holds us to account, and challenges us to make regular incremental improvements to our business.”
Chris (Financial Planner and Director):
“It is always helpful to have a critical eye and an experienced hand to push us (not so) gently in the right direction of travel when we need it. As we often do.”
Mark (Managing Director):
“Brett has challenged our status quo as a firm and helped us move forward in so many areas. We were previously suffering from ‘decision paralysis’ but some simple ideas and techniques have allowed us to unleash our potential.”
“Working with Brett has challenged my existing thinking for the better, which has led to a significant change in my mindset and approach to the business. Some really good foundations have been laid, which will enable continued personal and business growth.”
Helen (Client Support):
“The Fortitude leadership works well as a team, because we implicitly trust one another’s integrity. This ethos permeates every aspect of the way the business is run.”
“Having worked closely as a team for nearly ten years, having Brett challenge our firmly held convictions and existing processes has made a tangible difference to our business (and it’s been fun!)”