HR Block 2006 Annual Report Download - page 17

(Left to right) Kathy Barney, President, H&R Block Bank;
Rob Bernabe, Senior Vice President, H&R Block Mortgage;
Steve Nadon; Joan Cohen, President, H&R Block
Financial Advisors
STEVE NADON
President
Consumer Financial Services Group
Our Consumer Financial Services (CFS)
Group was established at the start of fiscal
2007 to better align the services and products
of three H&R Block branded businesses
with the financial needs of our tax clients.
Expanding our relationships – in ways that
no competitor can match – strengthens our
partnerships with clients in achieving their
personal financial objectives. That builds
client loyalty to the H&R Block brand.
To further leverage our new structure, we
are evaluating potential opportunities to be
more effective and efficient internally,
including the coordination of different ways
our CFS companies interface with the tax
business and how they market to clients.
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financial advisor. It’s another way tax professionals bring value to their clients. And when
clients deepen their brand relationship by funding a financial advisory account, we see
greater loyalty – a significant increase in retention rate for tax services.
H&R Block Financial Advisors opened more than 17,000 new accounts for tax clients in 2006.
Annual production revenue for these and previously referred clients was $31 million, or 16
percent of the Investment Services segment total. Since partnering formally began several
years ago, referrals from our tax professionals have brought in about 90,000 accounts and
$2.8 billion in assets. With referred clients rising beyond the number who could be helped
face-to-face, the H&R Block Financial Advisors’ Select Client Group call center was formed
in 2006 and is able to handle tens of thousands more clients.
Our business model of advisors partnering with tax professionals for client referrals is an
advantage in recruiting advisors. It differentiates H&R Block Financial Advisors from our
competition for talented people and attracts high-quality professionals looking to grow
their business. Advisors look favorably as well on the freedom they have to counsel their
clients without influence from proprietary investment products. H&R Block Financial
Advisors is benefiting from higher advisor productivity and disciplined cost management,
driven in part by investments in technology and other tools to serve clients better.
PROGRESS IN RETAIL MORTGAGE AND BANKING
H&R Block Mortgage provides direct-to-consumer mortgage loans nationwide. The business
was restructured during the year to improve cost efficiency while positioning it for better
service to customers. Loan inquiries are now handled faster and more efficiently within a
realigned network of mortgage centers.
The retail mortgage unit also sharpened its focus on H&R Block clients, and we increased
by one-third the conversion of referred tax clients to those obtaining a mortgage loan. We
introduced a proprietary software application enabling company loan officers to instantly
offer clients a menu of customized mortgage solutions. Total loans funded and average
dollar size rose in 2006, combining to increase total originations by 18 percent to $4.8 billion.
H&R Block Bank began operations at the start of fiscal 2007. Extending the brand to banking
gives us another competitive edge in the marketplace. The Bank will provide easy access to
affordable personal and business banking options, including traditional credit and FDIC-
insured deposit products and services. Our research shows about 7 million H&R Block clients
are underbanked. Through the Bank, we now have greater opportunity to help clients
improve their financial lives. The Bank also enables H&R Block to reduce its dependency on
third-party banks that currently fulfill certain banking needs for our clients, and it enables
us to house some of our corporate assets currently held by outside institutions.