Independent Financial Advisors (IFAs) are used to wearing many different hats. Frequently, their responsibilities include everything from asset management to financial consulting to marketing and sales. However, risk management often becomes trickier within the growing scope of duties. In this article, we’re looking at how IFAs can better identify and manage risks within their revenue streams before it impacts their bottom line.
Identifying common risks in your revenue streams
Financial advisers are well-familiar with the concept of risk; more often than not, some risk is a healthy element within any business. With risk comes rewards; however, the reward hinges on your ability to successfully find, mitigate and manage said risks within your revenue streams.
To ensure that you stay on top of all critical gaps within your business, you must adopt a risk management strategy that considers all your revenue streams and associated individual risks.
How revenue management mitigates risks
Revenue management solutions enable IFAs to better identify and manage some of the most common risks impacting their revenue streams. Successful revenue stream management focuses on the following critical areas.
1. Mitigate compliance risks
Manual processes are prone to human error, and tracking and managing all transactions from multiple revenue streams can be an administrative nightmare. Even so, each one of your revenue streams can impact your compliance, and identifying and mitigating exposure is quintessential in ensuring your business isn’t exposed. Tools such as automated revenue management ensure that IFAs have a 360 view of income avenues and drastically reduce the tension of the unknown. Not only will it allow you to easily identify and highlight any missing information regarding missing income and VAT mistakes, but the ideal solution will include built-in compliance checkpoints and data integrity checks to ensure that nothing slips through the cracks.
2. Identify changing customer needs
One of the core ways to manage risk in your revenue streams is by staying up to date with customer needs and buying behaviour. As your clients age, so do their priorities and market fit with your products and services. When relying on manual income stream management, these trends can be challenging to pick up quickly, and you can easily miss critical opportunities to match your offerings with their niche needs. To better retain your clients and attract new ones, you need insight into accurate, real-time data that reflects your ideal buyer personas and their shifting preferences.
3. Manage scale and capacity
As your business grows, there is always the risk of limited capacity, which ultimately limits your growth potential. To overcome this, your business must have the tools to scale and adapt without exposing the company to unnecessary risk. Automated revenue management solutions enable IFAs to streamline processes and free-up capacity while eliminating the stress of the unknown. In addition, through implementing an automated commission and revenue management system, IFAs can rest assured that all their remuneration models are accurate, fair, and risk-free.
4. Better data visualisation and analytics
Ultimately, better data visualisation and analytics are paramount to successful revenue and risk management strategy. The ideal revenue management system should equip you with an end-to-end view of all your revenue streams in one place. This allows you to pinpoint all areas for improvement, identify any unusual spikes or dips in incoming revenue and allows you to prepare proactive strategies that help you prepare and mitigate potential losses.
5. Bolster your data and information security
Information security and data integrity is paramount when managing reputational and financial risk. One weak spot and it can all come crashing down. To successfully find, manage and mitigate security risks and data breaches, it’s critical to implement a revenue management strategy that provides multiple layers of security protocols and encryption, performs regular audits, and runs daily database backups.
Gain greater visibility into your revenue streams with Commspace
Measure the effectiveness and sustainability of your revenue streams beautifully while keeping unnecessary risks at bay. With greater visibility into each revenue stream, Commspace generates insightful and powerful yet easy-to-understand analytics so you can scale your business and manage risks in one fell swoop.