Financial planners are putting regulatory uncertainty behind them and focusing on business growth in 2015, according to a survey conducted at the Financial Planning Association National Congress in Adelaide last month.
The survey, conducted by BoQ Specialist, found that planners have enough confidence in their businesses and business models to use personal assets to fund growth and expansion in the coming year.
Gareth Bird, head of adviser services for BoQ Specialist, says that “the key business answer that we got was, in terms of them focusing on next year, expanding their advice practices”.
“There are a couple of different aspects to it; but it’s not so much, ‘Let me buy a book of clients and pick up the recurring income and off I go’; it was more around finding the right sort of clients that fit into their model,” Bird says.
“And that talks a lot to the more prevalent fee-for-service adviser mindset. If you were a risk adviser you’d pick up the book and you’d pick up the commissions and you’d look to work the book again. I think advisers with their new professionalism or fee-for-service mindset are saying, how can I pick up clients that have got a similar sort of profile to my existing client base, that would fit within my investment methodology and philosophy?
“The advisers who approach it from that point of view are going to make better business decisions for themselves further down the line, as opposed to thinking it’s just a pure numbers game.”
Prepared to back themselves
Bird says there was a clear belief among advisers in the quality and strength of their business models that they are “prepared to take personal risk on it”.
“That is, leveraging their own homes and their personal wealth for their business acquisition,” Bird says.
“Whereas typically people would keep that separate and not put the home at risk, there was a strong view from a number of advisers who say I believe in what I do – and I’ve demonstrated that – and I don’t actually think I’m putting my family at risk by using the equity I have built up in my home.”
Bird says other groups that BoQ works with – principally accountants and medical professionals – have different views on the use of personal assets to fund business growth.
“Accountants tend to be more on let’s keep separate and for them it does become about asset protection,” he says.
“Your medical professionals tend to mix it up a bit more – they can be very intertwined between their personal and business lives. But it comes down to your own confidence, and they your track record in what you do.”
Strong underlying confidence
Bird says these findings reflect “a strong underlying confidence coming through the industry”.
“Regulation is there, and I think it’s constantly part of them, but there’s a very strong belief in what they do on a day-to-day basis,” Bird says.
“Before it was, let’s get distracted by that and let’s get hung up by that and let’s lose focus, now they are saying this is happening, we’ve got our association bodies and everyone out there fighting those fights for us, let’s get on with it.”
The BoQ survey was conducted over the three days of the FPA Congress in November. BoQ sponsored a coffee stand at the congress and surveyed financial planners who visited the stand.
“We ran the survey through an iPad so it was easy for them to fill out; and they had a minute or two to kill while they were waiting for their coffee,” Bird says.
“The engagement, aside from them just filling out the surveys, was actually very good, which helped us…get to hear their reflections on the conference and where they’re at generally.
“My impression leaving the congress this year was there was a far happier, more positive vibe…compared to last year.
“Even though it was on the eve of FoFA [regulations being disallowed], it seemed like it didn’t necessarily affect the mood.”
Complementary services
Bird says BoQ will use the results of the survey to develop business finance products for financial planners, to complement personal banking services it already offers to Certified Financial Planner (CFP) designated financial planners.
Earlier research for BoQ, conducted by CoreData, found that the main personal wealth creation goal of financial planners is to retire debt free. They also nominated paying off the mortgage, passing wealth on to their families, and being able to take an overseas holiday every year.
Bird says the survey a the FPA congress was a good opportunity to “get a feel for the state of mind and the state of being, which was far more positive than we’ve seen before”.
“There is that general level of optimism and positivity out there, despite everything that’s going on,” he says.
“And then it was good to get some feedback from them with regards to how they view themselves – which is not always high on their priority list.”
