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Can any adviser firm afford to rest on its laurels?

Can any financial adviser firms afford to rest on their laurels? And what are go-getting firms doing that their peers aren’t? ABR editor Rob Kingsbury posed these questions to Simon Olive, business consultant with FP Advance 


Rob Kingsbury: Can owners and directors of advisory businesses really afford to rest on their laurels, even if they are great financial advisers, or should they be constantly developing their businesses with an eye to the future?

Simon Olive: One of my favourite quotes is from JFK, who said, “Those who hang onto the past or remain in the present are bound to miss out on the future.”

I don’t think any adviser can ever rest on their laurels and not look to the future. If they are within five years of retirement, they have a good business with a decent remuneration model, then maybe they could drift in to retirement without making too many changes. But we find that even the businesses that have a good grasp of their proposition, that have worked on their pricing model and their structure, that are developing and looking to the future, can be operating as much as 30% short of their potential.

What has happened in most businesses over the years, is that they have made a series of reactive changes to external pressures, such as from the regulator, and as a result, they have business models that are somewhat disjointed.

If you asked most business owners to start their advisory firm brand-new and fresh, then they wouldn’t start from the point at which they are currently sat. With a clean slate, invariably they would build something different. And that would make quite a considerable difference to their overall turnover and profit.

What financial planners and advisers need to do is be mindful of the need to deliver their services in a more cost-effective and efficient manner. Even if the broader market doesn’t move there will be some pricing competition and those who are already ready and efficient will be able to embrace those moves against those who aren’t ready, who will be left behind.

RK: What’s driving the go-getting firms in the market? What’s the difference between good and great adviser firms – are the latter seeing opportunities the others aren’t?

SO: Simply put, it is business acumen. The firms that are leading the market have not come up with any revolutionary new ideas, they have just acted well in advance of those who drag their heels. They are able to see the need for change a number of years earlier than the rest of their peers.

In addition, generally they are the kind of business owners prepared to invest in themselves and their businesses. As a result, they become better business managers and business leaders, as opposed to sales people trying to run a business. They tend to have a clearer focus, they have narrowed the field in which they are working, their target market is defined, their proposition is tighter, and they have developed a corporatised model to that end. They haven’t suddenly come upon a brand-new market that no one else knows about, they have simply insured they are better equipped as business people to target the market in which they want to work.

More often than not they have invested the time and money to get business coaching and support, if they do not have the right skills and attributes from their past experience. The vast majority of adviser business owners are really good salespeople who have grown their client bases and their businesses over the years to the point where they have firms of a size that requires proper business thinking and business management and the right support infrastructure.

There is no shortcut route to it. Business leaders have to realise that they need to learn the appropriate management skills and have the courage to invest time and money in order to shift their thinking and move their business model forward.

In the past advisers have been able to tap into provider resources in respect of training and consultancy at one level or another. That kind and level of support has been dying out in the market as providers have sought to reduce their costs and so reduced the level of support to the adviser market. The firms in the market now have to buy in that support and it’s taken them some time to realise that, to put their hands in their pockets and become a proper business. The strings between adviser businesses and product providers are being steadily cut and the IFA market is becoming more business like in order to deal with it.

Simon Olive: Background

Since 1995 Simon has been coaching business owners & their teams across the market, helping them establish their goals from being in business and more importantly, helping them overcome the many challenges they face in getting from where they are now to where they want to be, whilst maintaining and growing productivity and profitability. He has worked with one-man bands to multi-million pound organisations with 50 staff plus.

Visit FP Advance website



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