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Best Financial Services Inc.
Best Financial Services Inc. is lead by Linda Best and has recently lost a top client. The
losing of the top client may leave the company unable to achieve its current growth rates or
even maintain the prior year’s profit level.
The case reveals that there are three critical issues which this company is currently
encountering. The first is revealed in the departure of Gerald Young whom although was a
satisfied client left for a company that was able to present a stronger brand image and more
developed marketing materials. The second is that ratio analysis revealed that the company has
performed very well but has lacked reinvestment of its own retained earnings as they have all
been taken as dividends. Finally the company now is presented with an opportunity to expand
with buying a block of business or hiring a new advisor. All plans that Linda takes now should
work towards her goal of retirement in 10 years time.
Marketing plan and Gerald Young
Gerald Young was a top client of Best Financial, further as per Best’s opinion he was
satisfied with her services. However after he attended an event hosted by Scotia McLeod he
was convinced by both the marketing materials and the brand image the bank was able to
present. This shows that both that Best’s current brand image and marketing materials are
insufficient but also that hosted events are an effective way of acquiring new clients from other
companies.
The marketing strategy will call for a total budget of $14,600 per month and will include
the creation of a website, maintenance for the site, monthly radio feature and two client events
per year. The radio and website will further the strength of the brand image and the hosted
events have been shown to usurp clients. See Appendix 1 for a breakdown of costs.
The website will serve two purposes. The first is to have a detailed history and principles
of the business to serve the branding goal. The second is to have client logins which will allow
her customers to check on their investments at any point which is both more cost effective than
the bi annual mail out and more relevant for clients.
With Linda’s strength in radio communication will go a long way to being a strong brand
image with public recognition. Her goal is to be as recognized as well as Scotia in the Sarnia
market. The budget calls for $7500 which is 12 spots per month, every month. The spots
should be once a week on each of the three radio stations to allow for max exposure into all
markets. It will allow her to give an image of being a larger company than she actually has.

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Ratio Analysis and reinvestment
As per appendix 2, Best Financial is able to exceed the industry average ratios,
estimated by Sun Life Financial Inc, in 5 out of 6. For Best Financial the sales growth rate is
positive as well as the net profit margin is three fold that of Sun Life. Further the net growth is
%50. Increased sales, increased profit on those sales, and outperforming both the market and
their prior year performance. Also in relation to these figures is the debt and interest ratios
that show the company has very debt load. This as well leaves the company in an advantageous
position that they could expand using debt; however it also shows that it may not be fully
maximizing the potential of their capital.
The only ratio that is worse than industry average is the total asset growth. As per
appendix 3, it is shown that she has increased her wage by 20% and doubled the dividend she
receives to over $100,000. The wage and dividend combined has left none of the earnings in
the company. Although she is entitled as the sole owner to dictate her own wage and dividends
it is bad from both a company and personal tax position. It leaves those funds unavailable to
grow the company as the $50,000 could have easily purchased the block of the business
without requiring debt as well as this pushed her into the highest tax brackets when she is
planning on retiring in 10 years. Excess earnings could be reinvested and grow in the company
and she may pull them out as equal earnings in a more tax conscious manner.
Hire an advisor or buy a block of business
Best has been left with an option to either buy a block of business from another firm or
to hire and train a new advisor to expand her business. Although she feels that she should only
do one or the other in the long run both should be considered. Her goal of wanting to retire in
10 years may necessitate the hiring of a new advisor and the block of business does have great
cash raising potential.
The block of business purchased, using Best’s estimate will have a retention rate of
between 70 to 90 percent and will generate good returns under either estimate over the next
10 years, see appendix 4. The addition of a new advisor does not have the same financial
returns as the block of business even with optimistic projections (appendix 5). However the
additional employee will in the long run allow her to maintain her work life balance and have
the company ready for transfer at date or retirement.

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Best Financial Services Inc. Best Financial Services Inc. is lead by Linda Best and has recently lost a top client. The losing of the top client may leave the company unable to achieve its current growth rates or even maintain the prior year’s profit level. The case reveals that there are three critical issues which this company is currently encountering. The first is revealed in the departure of Gerald Young whom although was a satisfied client left for a company that was able to present a stronger brand image and more developed marketing materials. The second is that ratio analysis revealed that the company has performed very well but has lacked reinvestment of its own retained earnings as they have all been taken as dividends. Finally the company now is presented with an opportunity to expand with buying a block of business or hiring a new advisor. All plans that Linda takes now should work towards her goal of retirement in 10 years time. Marketing plan and Gerald Young Gerald Young was a top client of Best Financial, further as per Best’s opinion he was satisfied with her services. However after he attended an event hosted by Scotia McLeod he was convinced by both the marketing materials and the brand image the bank was able to present. This shows that both that Best’s current brand image and marketing materials are insufficient but also that hosted events are an effective way of acquiring new clients from other companies. The marketing strategy will call f ...
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