Extraordinary people can make up for very ordinary systems, but when you have extraordinary systems, then you can work with ordinary people.
That saying resonates with Gil Gordon, a consulting senior financial adviser and owner at RI Newcastle and Lower Hunter, a practice that embarked on a corporatisation journey some years back.
Since then, its error rate dropped phenomenally and its revenue per adviser has risen by about 40 per cent as has the number of clients per adviser.
“The number of Statement of Advice documents a year has gone through the roof and our new business has gone up dramatically because now we can handle it,” Gordon tells Professional Planner.
RI Newcastle has five advisers, a general manager, two client service managers, two client service officers and a paraplanning manager. It also has two client service officers in the Philippines.
“We used to struggle to get a [SOA] per adviser per week,” Gordon says.
“These days we can get four or five SOAs out per adviser per week. There are weeks where we’ll be handing over doing 15 or 20 SOAs, which is murder, but it can happen.”
The why
RFS Advice certified financial planner Troy Theobald says the responsibilities and reporting lines grow along with practice growth.
“While you do not have to lose the family office feel, there does need to be a corporate approach for separation of duties and responsibilities,” Theobald says.
“Otherwise, you will be a problem in your business. A corporate structure sets out clear reporting lines and duties.”
The Gold Coast-based adviser adds a large practice 10 years ago is a small business today.
“The corporatisation of practices is key to allowing this growth to continue,” Theobald says.
“Having specific roles and responsibilities enables a greater focus and dedication to tasks and this hopefully delivers greater growth.”
What’s involved
Gordon says corporatisation needs to be about “working on the business, not in the business”.
He adds that involves getting clients used to dealing with other members of staff instead of just their favourite planner who, as the practice grows, may not be able to take every call from every client. And, if somebody is off sick, another person should be able to pick up the task to avoid bottlenecks.
Gordon recommends asking the AFSL what work has already been done by other practices in the same network and what threads and reporting frameworks are used. “Often it’s just a matter of copying and pasting,” he says.
He says the first step in the corporatisation process is to identify your practice’s weaknesses. From that, you would determine what good practice looks like and then standardise the practice workflow to create a framework where staff do things the same way.
The next step is to bring your client service managers into your meetings with clients. “You have to really edify the team to the clients because then the clients are confident to work with staff and stop harassing the adviser.”
Gordon cites outsourcing as the low-hanging fruit of the corporatisation journey. His practice uses Planlogic which provides paraplanning and other solutions which simplify the advice process.
RI Newcastle also outsources a lot of administrative work to the Philippines and uses advice practice software Xplan.
“What happens is that you get 80 or 90 per cent of it right and then it takes a few months to tweak it,” Gordon says.
“But if you are seeing more clients, receiving more revenue per adviser and having less stress, corporatisation makes perfect sense. However, it’s an ongoing process that doesn’t end. You just keep going further down the path.”
