Story Wealth's Anne Graham

Despite the myriad pressures facing advisers, now is a prime time for advice practices to invest in the growth of their business according to Story Wealth co-founder and principal adviser Anne Graham.

The adviser exodus has had a clear impact on supply and demand levels across the market. As the industry has declined by a third to about 19,000 advisers, leaving clients orphaned in many instances, the demand for adviser services has grown.

According to Graham, this dynamic has coupled with the industry starting to find its legs again after the horrors of the Hayne royal commission to create an environment where strong, stable advice businesses are in a great position to invest in growth.

“Generally speaking there’s a lot of opportunity out there in advice at the moment,” Graham says. “We’re still in the middle of a lot of change, but coming out of the royal commission with no banks in advice and less of a focus on the lookback stuff from ASIC, the industry is getting its rhythm again.”

Advisers are getting better at costing out advice without the influence of subsidies, she says, and pricing accordingly.

On the consumer side, strong investment performance over the past 12 months – the S&P ASX200 is up 23.06 per cent – has kept confidence afloat despite the difficulties brought on by the pandemic. “The markets have done well, which has gotten people excited,” Graham says, adding that this shouldn’t be underestimated as a significant tailwind.

Another good sign, Graham notes, is that there hasn’t been much negative news around the industry for some time. Aside from Melissa Caddick story, where the accused was wrongly labelled an adviser by a number of mainstream publications, the industry has quietly moved on since the royal commission.

“We tend to focus on the bad news, but from a consumer perspective there hasn’t really been any bad news about advisers for 12 months or so,” she says.

Graham will speak on a panel with AZ NGA chief executive Paul Barrett about what it takes to thrive in advice in the current environment. To attend the event via livestream, register here.

Not always easy

The past year has been a “ripper” for business, Graham reckons.

To accommodate the potential she sees in the retirement market that Story Wealth focusses on, she says the business has gone “top heavy” with staffing. The business has also invested heavily in its tech stack and online systems.

Despite her confidence, Graham says positioning for growth isn’t always easy. The adviser is refreshingly candid about what the business does and doesn’t do well.

“We struggle with execution and being brave enough to take on risk, and we’re certainly not the most efficient practice in the world” she says. “Change is difficult.”

The regulatory burden also remains a significant challenge, the adviser says, noting ASIC and APRA’s recent exhortation for fund trustees to request client SoAs of advisers. Last year Graham questioned how ASIC could expect advisers to write shorter SoAs while it was still threatening them via its ‘lookback’ compliance program.

Like many small, self-licensed entities that have splintered off from larger licensees, Graham reckons one of the major challenges has been learning to shed legacy systems and processes.

“Licensees managing hundreds of practices can’t see what everyone’s doing so they cater to the lowest common denominator,” she says. “When you come out of that environment as a practice you stick to a lot of those processes at the start but as you go through you question why it’s done that way, and you start critically looking at what your doing.”

The crucial thing is to decide as a business whether you want to maintain the status quo or move forward, Graham says. If growth is the chosen path, the next question is: what does that mean?

“And that all depends on how you want to grow. Do you want to become more profitable, build the business so it’s more saleable, or just get bums on seats to build more funds under management?”

One comment on “Advice businesses primed for growth right now”
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    Liam Shorte - SMSF Coach

    Great insight and honesty Anne. These are the best of times (so many prospects), these are the worst of times (paperwork, so many different requirements, compliance overload). We will come out stronger

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