Most financial advisers are personable people.

Their personality and natural disposition is what makes them so good at their job. They can get people to open up and talk about their goals and aspirations. They can challenge them to save and invest for the future.

But agreeable people are also prone to saying yes all the time, which is bad for business.

It is the reason why so many advisory firms offer a hotchpotch of uncoordinated services, hire extended family and have large, unmanageable (and unsalable) clientbases. They entertain bad ideas for way too long, whether it’s a potential acquisition or pets in the office, and they end up sponsoring every marathon, bike ride and primary school within a 10 km radius.

Advisers who say yes all the time – or just can’t say no – typically don’t have a clear business model or strategy. If they don’t start saying no and, importantly, understanding why they’re saying no, they won’t be in business for long in today’s tough operating environment.

As an investor in accounting and advisory firms, AZ NGA says no to potential targets at least 10 times for every business we invest in.

[Editor’s note: this is the second column in a series Barrett will write exclusively for Professional Planner this year based on the insights he’s gathered as an active acquirer and investor in advice practices. You can read his first column here.]  

We’re looking for entrepreneurs who can say no to the wrong things.

A sign of a business that probably says yes too often is strong top line revenue growth but poor profit growth. These businesses are creating tomorrow’s problems with today’s solution.

When we meet with their leaders and ask them to describe their target client, detail their value proposition and explain how they deliver their value proposition, their responses are vague. If we ask their advisers and key staff the same questions separately, we get multiple, different responses.

However, businesses that are successfully growing their profitability have a clear vision, purpose and strategy which comes from the top, and that vision and strategy is communicated and socialised to all staff and stakeholders.

The most junior member of staff understands that strategy and how they fit into the bigger picture.

Strategy guides the organisation’s decision-making. It empowers the board and management to be disciplined about who and what they give their time, resources and energy to.

It’s a culture that says “it’s okay to say no”.

Advisory firms with a “no” culture typically have clean and simple back-office infrastructure; highly efficient and coordinated systems and processes; fewer staff but higher staff satisfaction; better cost management; and higher client engagement.

Basically, they make more money and fewer mistakes.

In the AZ NGA network this dynamic is playing out. One of our largest firms provides general, holistic advice to two specific client segments. It never deviates from its target client. This business is one of the most profitable with the lowest employee cost to revenue ratio, and highest client and staff satisfaction.

The risk of saying no

A “no” culture sounds contradictory to many leadership books on innovation and growth.

CEOs are lauded for daring to try something different, taking greater risks and failing quickly.

There is nothing inherently wrong with saying yes. Business owners just need to be selective about who they say yes to.

One firm in the AZ NGA network says “yes” to almost every doctor, surgeon and medical professional that walks through their door. Another practice specialises in UK expats. Both firms say yes a lot but they’re crystal clear on the business they’re in and not in. That clarity extends beyond just client acquisition. It flows into staff recruitment, vendor selection and their approach to continuous improvement. Only ideas and proposals that align to their strategy are explored.

In the same way, saying yes to everything exposes businesses to the risk of saying yes to the wrong things, saying no all the time, exposes them to the risk of missing out on opportunities.

The key is the knowing which opportunities to pass on, which ultimately boils down to having a clearly-defined strategy.



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