Growth is a key focus in the upcoming fiscal year for advice businesses as they look to add more financial advisers, despite a competitive landscape for talent.
Personal Risk Professionals managing director Mark Everingham tells Professional Planner his business is in “growth mode”.
Everingham plans to grow the business “organically via our existing professional partner relationships and through merger and acquisition activity” with firms who don’t want to do life insurance advice anymore and would prefer to focus on areas where they have more expertise.
Seneca Financial Solutions CEO Luke Laretive says he is looking to hire more financial planners in the following year and grow the business “as aggressively as we can”.
“We just want to grow, we just want more clients,” he says, noting he looks to add advisers with well-established client books they can bring over to the firm.
Laretive says the business has already achieved a significant level of scale to cover the foundational costs of doing business.
“Any advice business is kind of the same; you have a high install, fixed-cost base,” Laretive says.
“But once you’ve covered those costs, every incremental client that comes on is highly profitable. For us, we’re just trying to put on as many clients as we can.”
Although Laretive also notes the cost of doing business has risen with rising fees from platform and software providers, as well as the rising costs of Professional Indemnity insurance and the ASIC levy.
“We’ve been in business for seven years, I would say the cost of business have gone up 20 per cent over that period,” Laretive says.
“They’re [software providers are] very quick and keen to pass on their prices every year, so certainly those products have gotten more expensive.”
The access to qualified talent for businesses looking to hire in the near future is a widespread challenge because of the reduction in adviser numbers, which has seen 12,000 leave since the conclusion of the Hayne royal commission.
“We continue to look for good talent that’s out there, but I think it’s a pretty finite resource,” Everingham says.
The technology aspect is one which will pose a challenge to businesses in the next year and Laretive says Seneca will look to evolve its usage of technology which has not been a priority in recent times.
“I’m thinking about CRM, data management, marketing, website and graphic design,” he says. “These are parts of our business that need attention and time.”
Everingham also wants to improve technology usage to save time for the team to focus on valuable client work.
“There’s a lot of stuff that can be automated to alleviate some mundane and repetitive work,” Everingham says. “We’d rather our people doing value add stuff for the clients.”
Advisers continuing to demonstrate tangible value to clients is a challenge that remains and Business Health principal Terry Bell emphasises the importance of advisers showing objective value.
“I think the issue of value – demonstrating it objectively and continually is the single biggest challenge facing practices,” Bell says.
“Never assume that the client is happy just because they haven’t left you yet.”
He suggests that businesses should think about their online presence and how they articulate their service to the market.
“Half the practices we’ve surveyed don’t have a client value proposition,” Bell says. “They might have it in their head but haven’t gotten it on their website.”
