Kelli Willmer

It’s unusual to meet a financial adviser who says the reason they got into the profession was because they really wanted to run a business. It’s true for some, perhaps, but for many advisers being a business owner is a consequence of wanting to be a financial adviser, an unavoidable extension of their vocation and career.

It’s fair to say some do it better than others, but that some are more enthusiastic about optimising the performance of client portfolios than optimising the performance of their own business.

For those that want to, however, benchmarking is an invaluable tool to help understand how they compare to similar businesses, and where there are opportunities to improve.

The trick with benchmarking, however, is how to convert the results into real-world actions. It’s one thing to know an area of an advice practice could be improved; it’s another matter entirely knowing how to do that.

It often helps to get feedback and tips and advice from other business owners who’ve been there and done that, because “usually, advice practices don’t know where to start”, Iress executive general manager of wealth – Asia Pacific Kelli Willmer tells Professional Planner.

“Every business has the opportunity to improve,” Willmer says.

Willmer adds they might be doing a “stellar” job in one or multiple areas, but there might be a separate part that is lagging.

“It might not necessarily be a massive deal-breaker for the efficiency of that practice, but certainly, if there’s any gains, especially in this [environment], where margins are stretched or under pressure… that can be achieved, then having that insight, even if it’s incremental, that will give you that push to towards that next little bit of efficiency,” Willmer says.

Willmer says an advice firm might be, for example, “running a little heavy” on full time equivalent staff.

“Is there an opportunity to tighten up a process, and maybe not bring on that additional person that they were planning to do?” Willmer says.

“Salaries on a P&L [profit and loss] sit very closely to the tech expense on a P&L, so where you can get greater efficiency through your technology and through your processes you could maybe hold off on the need for additional headcount in the short term, or [it may be] an opportunity to hold off completely.”

Willmer says advice firms can sometimes become complacent around business processes, such as where legislation or regulations change, or even where a licensee’s requirements change, and a process could be simplified, but the business clings to the old way of doing it.

“Or it might be that you could get a quicker report, or a more in-depth report through a process that would give you greater insights into your client engagement or your advice process or your business operation,” she says.

“Just having that touch point I think is really important and can give them great wins. Benchmarking just continually gives them that insight and it would be something that I’d recommend they do on an annual basis, as a minimum.”

Advice firms have a range of places they can go to acquire the tools they need to benchmark the structure and performance of their firm. But a community that delivers support and insights on how to go about it is rarer. Willmer says peer contact and guidance is an integral part of the Advisely platform launched this month by Iress.

“I think the shortcoming is probably the ‘what next?’” Willmer says.

“It’s great to have a report, but how do you actually action it? And again, if you’re wearing a lot of hats in a practice, how do you find the time to focus on that?”

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