Commissioner Kenneth Hayne’s final recommendations are in response to misconduct exposed through the royal commission hearings, where wealth management firms were found to have put their primary focus on selling products instead of doing the right thing by clients.
If we are going to build strong, sustainable growing businesses that deliver real value to our clients, we can’t keep doing the same things we’ve done in the past over and over again expecting a different result.
So before things get too busy, this is an ideal time to look at where you are, where you would like to go and what you need to do to get there.
Start with the big picture
A common mistake at this point is to get lost in the detail. Reviewing your software or your cost base is all very well but this is coming at the challenge from the wrong end.
Instead, aim for clarity on the big-picture issues. While these typically sound straightforward, they are rarely easy. In fact, you will find that this clarification effort often will be an ongoing project involving multiple drafts.
- Start with your ‘why’
Ask yourself what your purpose is. This is way deeper than “I want to make money”. My experience is that the best businesses combine simplicity with power in their purpose.
- Are you leading the life you really want?
How does your business fit in with the rest of your life – your family, community, interests? How can you make it work in ways that provide space for every facet of your life?
- Why are you sacrificing yourself?
If you want to achieve your goals, there will always be sacrifice. But you must be very clear about what are you willing to give up to achieve what you want.
The answers to these questions could change your life. For now, work on them before the year gets into full swing. Refer back to them later and update them, if necessary, to reflect how you feel as circumstances change.
Who are your ideal clients?
If you’re fortunate enough to be doing OK in your practice, and you are not just in survival mode, this is a question that can have major implications for your future.
Think about your experiences from last year. How much did strong relationships drive successful outcomes? What sort of people did you enjoy working with the most? Could you refine your focus and refuse to accept anyone who doesn’t meet this new, tighter definition of your ideal client? What would be the implications?
Many of the seasoned advisers I have talked to over the years say that if they were pressed to give just one piece of advice to their younger selves, it would be to work only with their ideal clients. Life is too short to work with people you don’t care for.
Deciding to work only with people you want to work with is a recipe for a more successful and efficient business and a happier adviser.
Review your offering
Once you’ve established what you are in business to achieve and have identified the people you want to work with, it’s easier to assess your proposition.
Ask yourself to name the top five issues or concerns that your ideal clients face. I can tell you those issues will be ‘above the line’ not ‘below the line’. In other words, they will be people-based not product-based. They will be meaning-based, not necessarily money-based or investment-based.
The issues your clients place the highest priority on will be along the lines of: “I really want you to know me and my family, understand us and help us, simplify and declutter our lives, and provide us with structure and clarity.” It will be all about providing them with peace of mind, so they can sleep better.
Clients might be concerned about how their children can get a start in the property market or how they can better care for their ageing parents. But underlying all this is an emotional plea for clarity, structure and understanding.
The point is that once you grasp these fundamental issues, you will be better placed to develop a proposition that makes you stand out from the sea of advisers whose offering is built around below-the-line concepts such as “superannuation, insurance, investments, pensions etc”.
As your proposition takes shape, the next issue to address is whether you have the team, structure and skills in place to deliver your proposition.
In assessing your team, ask yourself whether they have the right skillsets to deliver the service your clients require. And look at yourself. Are you the best person to manage the team effectively or would you be better off with a practice manager?
Having a strong team and structure allows you to do what you do best and make the best use of your time – which is probably seeing more prospective clients and centres of influence.
When I ask most businesses about their goals for the year, they talk about revenue, profit, or AUM.
That’s all very well. But how is that going to be achieved? Why didn’t you achieve it last year? What are you going to do differently?Focus on laying the foundations for three and 10 years ahead. Make all your business decisions long-term ones. Short-term decisions and results won’t get you off the hamster wheel. Most businesses overestimate what they can achieve in one year, but underestimate what they can achieve over three or five.
It looks like 2019 is going to be a big year in more ways than one. While it is pointless making predictions, it is a fair bet that if you set perfection as your goal you will be unlikely to achieve much.
On the other hand, if you start this year developing a clear idea of who you are, what you value, what you are in business to achieve, and who you want to work with, you will be much closer to developing an offering that people will value and which will make you stand out from the crowd.
David Haintz is founder and principal of business-to-business consultancy Global Adviser Alpha. He is a past director of the Financial Planning Association of Australia (FPA) and was a founding director of Shadforth Financial Group.