For all of 2022 and the start of 2023, the industry was focused on the Quality of Advice Review.
Considerable time and energy has gone into reading consultation papers, attending briefings and preparing submissions.
This is not a complaint. The advice review is an important, much-needed look at the effectiveness of the regulatory framework. It promises to significantly reduce complexity in the system, ease the compliance burden on advice businesses and improve advice accessibility and affordability.
It signals the dawn of a new economic era for financial advice, but there’s no doubt it could be an excuse not to progress areas within our control.
While Michelle Levy’s recommendations are far from a fait accompli and the industry must lobby to ensure sensible reforms are adopted, advice businesses must focus on serving their clients and capturing opportunities to build their businesses.
Those that wait for greater regulatory certainty before making positive changes to their business risk falling behind or missing the boat completely.
Amidst the noise, good businesses are always looking for ways to improve the quality of their value proposition and enhance their service delivery. Under all conditions, they get on with executing their strategy.
They may get involved in advocacy via their industry body or licensee or by directly engaging their local Member of Parliament but their top priority is what’s happening inside the four walls of their business.
They actively seek feedback from staff, clients and business partners, and use that feedback as an invaluable input to their strategy and strategic priorities.
Ultimately, businesses grow off the back of client ideas. Consumers determine the relevance of current solutions and what is a fair price for those solutions. The most successful businesses are able to adjust and expand their offer to meet the evolving needs and expectations of clients.
Given the scarce resources inside most businesses and their limited capacity to recruit additional staff, advisory firms need to leverage internal resources and seek support from external service providers and business partners.
Often an impartial third party is able to identify opportunities, threats and solutions that management and staff miss because they are too close to the business or they don’t have the right skill set and exposure to the broader industry.
The same principles apply to licensees and adviser services companies.
They also need to evolve their offer to keep pace with the changing needs of advice businesses.
While licensees and service providers to the industry have a role to play in terms of representing the interests of advisers, and educating politicians, regulators and other decision makers about the practical application and impact of regulation, they exist – first and foremost – to help advisers run efficient and profitable businesses. As such, their capability must broaden to accommodate the evolving needs of the businesses that remain, many of which have swelled to a significant size.
These days that’s less about licensing and compliance (although both are fundamentally important) and more about working with businesses to ensure the right strategies are in place and the right processes exist to see the strategies executed. That includes robust governance frameworks to underpin long-term growth and sustainability. It’s more about adding scale and capability to address the challenges businesses face every day.
Businesses that are committed to progress aren’t afraid to hear hard truths and get a little bit uncomfortable. Change, even good change, can be uncomfortable.
For example, if the proposals from the advice review are implemented, it will simplify the advice process and reduce the compliance burden on businesses but adjusting to a new and possibly better way of doing things will still be challenging because it means change. If change is not managed properly, it won’t deliver the intended benefits.
Good advisory practices listen to their clients and stakeholders, and focus on serving their needs. They are continuously improving their offer and operations so that whatever changes occur, be they regulatory, structural or economic, they are well positioned to capture opportunities.
This is the one major problem with the financial planning community…an important part of being professional is the strength of our political voice…BUT instead we get articles like this…” lets get bavk to building our businesses, make the most of things, streamline…etc”…instead of taking a proactive stance…doing whatever it takes as a collective to shape our own future. We, as a collective are week and wishy washy…no wonder we have never had great representation through APA and FPA etc…because we as a collective have let ourselves down…we have failed to stand up and fight at every turn.. we complain about ASIC, about legislators about consumer groups…but hey…we are the ones letting everyone walk all over us. We are our own worst enemy. We allow lawyers (no offense Michelle) tell us how we should be set up…we allow politicians to tell us they will impliment this change but not this one ( sorry Steven)…every other profession has had to fight toothband nail.for what they have…legilators dont want to havevto babysit us…they want us to stand up and take ownership…but we never do because we dont have enough pride in what we are..what we do…just how important our role is in society. Lets stop rolling with the punches and start hitting back…dont suggest something and then accept knockback. We need..NO..”MUST” sharpen our political voice…we must unite behind our representative voices..
We must accept nothing less than our solution. So no, i wont concentrate on my business alone…we are ” all our businesses business”