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Is the lifestyle advisory business model sustainable?

Many adviser firms are run as lifestyle businesses. But as the market changes and becomes more corporate, is the lifestyle business model sustainable? We posed this question in part 2 of our interview with Simon Olive, business consultant with FP Advance 


Rob Kingsbury: There are numerous lifestyle businesses in the market with long-term clients who deliver a steady revenue stream (with new clients found to replace any lost along the way). But increasingly we’re hearing that adviser firms need to think like businesses where the owner could walk away and the business would still run itself. In your view, is the lifestyle business sustainable long-term?

Simon Olive: For a long time people have talked about how in the post RDR market adviser businesses would need to have scale to survive. I have never supported that viewpoint. I don’t see any reason why the lifestyle advisory business is unsustainable over the long term. But in order to handle the increased levels of administration, regulation and compliance, they will need to corporatise their business model, in terms of systemising it properly and, where appropriate, make use of outsourcing opportunities.

They will need to be focused, just as any larger business would need to be, and implement standardised processes and practices as well as look to how they might benefit from outsourcing to external administration, telephone and reception, paraplanning, and investment services.

To an extent, I think both the RDR and the market have driven businesses to become more structured. Most adviser firms these days operate with one or two platforms as a core, and more and more businesses are refining their propositions and using investment solutions that are based on model portfolios or are outsourced in some way to a multi-manager or a DFM. So whether they are a lifestyle firm or a medium to large firm they are all following the same sort of tracks.

But, of course, every business is different and every business owner has different needs. If the owner requires an income of £50,000 a year and that can be sustained from 20 clients that is going to be an easier business to run than if they have a £100,000 a year lifestyle and 100 or so clients that are having to be maintained and serviced in order to support it.

In due course, the lifestyle business owner has a choice whether to sell their client bank to another firm, because there isn’t a business as such to sell once the adviser has left, or if they have the facility to bring through their son or daughter to take over the business and the clients, while they keep a percentage interest in the business and draw an ongoing income from it.

In my view, lifestyle businesses needs to be well structured to survive, but they can survive.

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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