*This article is produced in partnership with Civitas Services
At a time of looming intergenerational wealth transfer and growing demand for financial advice, many advice practices have come to the point where they need to re-assess the most viable and stable path forward.
This means that some of these advice practices will choose the road less travelled, but with more flexibility and independence, opting for self-licensing.
However, if they go for the independent option, there is one thing they are almost certainly going to miss: a trusted community.
According to Mark Stephen and Murray Swilks, co-founders of Civitas Services, advice practices who decide to set up their own AFSLs will need a “a very clear roadmap”, which will explain to them the path ahead, often viewed as “quite complex and daunting”. But most of all, apart from trusted partners who will walk them through a process of regaining control over their own business, they will need “a sense of belonging”.
Stephen, who has over 30 years of experience across financial services and served as the CEO of Lonsdale Financial Group between 2010 and 2020, has said that Civitas, was born out of this mentality.
“The word Civitas is a Latin term whereby a group of people come together as an organised community so that set the scene from the start,” Stephen tells Professional Planner.
“For those who want to take the ultimate control of their business, to establish a better sense of stability from a licensing perspective, and to ensure they have the best chance to deliver on their business strategy, then getting their own AFSL is the key. It is the manner which to do so and who best can provide that authentic support, experience and capability set that has years of experience behind it, that is probably the lead of why we exist and that has been clear from inception of Civitas.”
Swilks, whose professional career began in the ‘90s in mid-tier accounting firms and has since been dedicated to helping small businesses succeed, added that one of the things he noted over the years was that principals of advice practices were also “great business people” meaning that they also had the necessary skill set to run their own license.
But there is still a couple of myths out there that need to be debunked as far as self-licensing is concerned and many advisers still view the path to self-licensing as “too hard and too complex”.
“It has become evident that a lot of the businesses we are dealing with are better at running their own small AFSL than those who they were previously renting it from,” Swilks says.
“That is not that hard [but] there is this whole industry… who were trying to tell great business people how to run a business and it just seems counterintuitive.”
Both Stephen and Swilks, have also highlighted that ‘reputation is everything’ when it comes to building a group-based community of high performance, humble achievers and it must be built on mutual trust.
Stephen says that, according to the internal survey among Civitas’ member firms conducted last year, most businesses they work with and who have joined the Civitas community are drawn by his and Swilks’ industry experience, background and knowledge which “comes with a level of trust”, something that both founders take as a huge compliment.
“It’s all about our reputation – you turn to those who you trust and because they know us, they know our reputation, they know our brand, our cultural alignment and they know they can trust us,” Stephen says.
Leaders not followers
Civitas currently works with around 55 businesses and is expanding nationally, but both founders are not shy to admit that they are very selective who they work with.
“We don’t compromise on new member firms who we are inviting to our club… but once you are inside the club you are made to feel very special, with the work our management team provides and the ongoing counsel and support,” Stephen says, adding they want to work with “high performing, high calibre advisory professionals” who are leaders in the industry.
“That has got to be that cultural alignment and a very specific preferred profile of business and we have stuck to that since the first day. If you want to play in the premier league, then come and play with us.”
Although Civitas has put a number of how many firms it wants to partner with, its owners have stressed that, most of all, they want to keep a ‘boutique nature’ of their business, a sort of intimate community of high calibre, high performing peers which requires some reciprocal trust between people who will not only share their ideas but also challenge one another.
Independent model
Civitas Services offers a full range of licensee service solutions, but most all of it aims to assist its members to become better leaders.
“Very few [firms] have come to us because of technology or research – these are just commodities and everyone can get technology and research and compliance and everything else,” Stephen says.
“Yes, we have got a buying leverage that goes with that but existing self-licenced businesses (as well as those transitioning to their own AFSL) come to us because they want a sense of belonging and they want to be part of this high-performance culture that they have been missing because they have been on their own.” We also spend a lot of time with our businesses, we listen to them, understand their issues, and tailor our training to help address those issues. And our advisers have appreciated it, regularly telling us that our resources and programs have helped them with their business issues.
“When developing our business model we needed an approach that was not subject to the pressures of supporting other revenue drivers or other in-house business units. There are plenty of options for that type of approach to licensee support. Our community have appreciated this and has allowed us to concentrate on the essence behind Civitas – Building better businesses” Stephen says.
“As an example, we run several peer groups across the community so around 6-8 business principals get together and they talk about their business issues and how to be better at what they do. We don’t talk about product and we don’t talk about technology because it is sort of a minefield of useless discussions… and once you start running products or having some sort of conflicted influence of that nature, it detracts from getting together.
“The presence of small AFSLs is no doubt increasing. Support for this segment has also increased which has further highlighted the wide ranging approach to community based groups. Should businesses need support and want to be part of a community, appropriate alignment can be the difference between a good experience and just getting by.”
The ongoing growth of Civitas is directly attributed to their keen awareness of the invaluable feedback provided by their adviser community. With adviser satisfaction ratings consistently reaching an impressive nine out of 10, Civitas acknowledges that this feedback is pivotal to their continued success.
