At a high level, and most visibly, the factors driving structural change in financial planning, when each looked at in isolation, tell a story of an industry rapidly transforming to a profession, driven primarily by regulatory change. But what is really happening is the structure of the industry is fundamentally changing before our very eyes, and only those businesses that can adapt will thrive in future.
So now we get to the key question: So what?
Translating the significant structural shifts that are sweeping the financial planning industry into a series of actions businesses can take to remain viable and thrive in future is a daunting task.
For advice businesses, delivering advice that adds real value to clients’ lives, and demonstrating this value, is imperative. Every interaction your advice business has with your current and prospective future clients is an opportunity to let them know you are there with sound advice to improve the quality of their lives.
In terms of client relationships, “use it or lose it” is the guiding principle for the future, as if your clients aren’t actively engaged, you run the very serious risk of them leaving your business to direct-to-client advice models delivered by institutions who are building direct advice businesses and/or nimble new entrant competitors.
The key competitive advantage you have is your client relationship, so don’t forget you need to spend as much of your valuable time as possible preserving this distinct competitive advantage (that is, in front of clients, not picking stocks/funds or running your back office).
Use technology effectively to engage and keep your clients informed. Run a business, not a practice, that has robust systems and processes to ensure it is not principal-dependent. Be open to ways you can continue to learn and grow as a professional, as well as personally. Talk to your peers and learn from what they’re doing to see if there’s anything you might want to apply in your business.
Importantly, how you deliver your services in future is key. Ensure you have repeatable, scalable processes in your business that enable efficiency. Source, retain, empower and train and develop the best people you can, as they will be the ones that deliver your competitive advantage into the future.
The role of the dealer group
So in this changing landscape, what is the role of the dealer group?
Maintaining high standards of effective governance and active monitoring and supervision are basic building blocks of future success as this rapid transition occurs. Remember consumers are accessing information about their adviser and their advisers’ commercial affiliations before they come to see you or your advisers – your brand is who you are.
As a dealer group, ensuring your people, governance and risk management systems and supporting processes are robust is fundamental to future success.
Make sure you have the ability to support your advisers with meaningful tools and resources that will support them in the smooth transition to a Profession. This isn’t about advice on its own: it’s about ensuring the sustainability of your advisers’ businesses through enabling them to deliver great advice, efficiently, in a way that effectively manages risk now and long into the future.
Deliver ease of client engagement via supporting the advisers’ regular client conversations with a range of online tools, so clients can keep engaged and up-to-date with their adviser (and their advice) anywhere, anytime.
Make the advice process as efficient as possible without compromising professional standards, so your advisers’ business processes are repeatable and can be delivered or accessed seamlessly from anywhere.
Provide easily accessible benchmarking tools so your advisers know how their business is tracking against their individual objectives, and against their peers.
And when they get stuck or are challenged with the stress associated with sudden change, ensure you have support and business coaching available to help them through.
There is no ‘silver bullet’ around such sudden and significant industry change, but ensuring you accurately diagnose what’s changing to position effectively for the future will define who will be successful in the industry in ten years and who will not.
