When Count chief executive Hugh Humphrey looks around for insights into how to help advisers create better financial advice businesses, he routinely looks outside the advice profession.
Humphrey, who has now passed the two-year mark at the helm of the listed financial advice and accounting group, says benchmarking Count against other licensees is one metric for success, but doesn’t want to constrain his perspective to only the financial advice profession.
“Client experiences in completely different spaces – that’s where we should be benchmarking,” he tells Professional Planner.
It appears that looking further afield is starting to pay off. Count has emerged from CoreData’s latest Future of Advice research with 91 per cent of its advisers expressing satisfaction with support and services it provides, the best result of any licensee in the survey and well ahead of the industry-wide average of just 74 per cent of advisers.
The CoreData research shows the proportion of advisers satisfied with their licensee has increased across the board this year, from 66 per cent a year ago. And it further notes that satisfaction with a licensee generally declines during a merger. Count has bucked that trend.
Humphrey says Count conducts quarterly engagement and net promoter surveys with its advisers, “and those quarterly assessments kick out quarterly action plans”.
“You’ve got to test it regularly, and it changes over time,” he says.
“We balance engaging with the advisers – to understand what are they seeing in their business, what are their clients looking for, and what services and support do they need to best deliver to their clients – with also then a market scan of what is happening, in particular what are other businesses experiencing, not just in our profession but outside as well.”
Humphrey says the quarterly surveys and feedback are crucial to driving the direction of the licensee, but he also has an open mind to other parts of the commercial world.
“Scanning the market and understanding different developments is key, but [so is] not limiting that to financial advice or accounting, which are the two core parts of our business,” Humphrey says
“There’s a lot of interesting developments in other consumer businesses that we can learn from, like client engagement processes.”
It’s not only about adviser numbers
Since Humphrey was appointed, Count has undertaken two significant acquisitions: first, the Affinia licensee from life insurer TAL, whose advisers were added to the Count licence; and Diverger, the owner of the GPS Wealth and Merit licences, which retain their own distinct presence and culture within the group, alongside the Count licence and Paragem (also acquired as part of the Diverger deal).
This activity has lifted Count to near the top of the licensee tables measured by authorised representatives (AR), but Humphrey professes to be uninterested in this measure. He says he’s much more interested in the number of practices in the network, and that in any case Count’s growth plans are not dependent on ever-increasing adviser numbers.
Humphrey says it’s as much about attracting the right sort of practice to the fold as it is about moving the wrong ones on. Humphrey says there have been plenty of instances of adviser numbers falling and licensee profitability increasing.
“I’ve always had the view that reporting on AR numbers is almost entirely irrelevant and that’s because an AR is not identical to the next AR in terms of quality or revenue or profit, or anything like that,” he says.
“It’s quite a misleading statistic.”
Again, Humphrey looks outside the advice industry for an analogy.
“It is probably a little bit like back in the days when I was in telecoms,” he says.
“There was a race to have retail stores. The competition was, who’s got the most retail stores? And then very quickly, it [became] that it’s not the competition, in fact that’s quite expensive, but who’s got the most customers? And then that refined to who’s able to make the most money from their customers?
“I think that’s where we’re focused. We’re not distracted by this concept of just of an AR number and, in fact, it’s often reported, and it frustrates me a little bit.”
Focusing on the middle
CoreData APAC chief executive officer Dean Thomas says the Future of Advice research suggests growth for Count will come from focusing on “that middle cohort” – the 54 per cent of the group that have intentions to grow but have not implemented growth plans.
“The real opportunity for them is to identify those practices that say they want to grow, but haven’t yet got the strategy or structural knowledge in place to turn themselves from an advice practice to an advice business,” Thomas says.
“And I think that’s the key. How do you move them from just being an advice practice to being a business that provides advice?
“Just imagine what they can do, if they start to move into the same metrics as those people with strong growth. That has an exponential increase in revenue for the licensee; and an ability for advisers to see more clients, which will in part also help address the advice shortfall.”
Maintaining the identities of the Count, GPS/Merit and Paragem adviser communities remains central to Humphrey’s strategy, and he says the approach has little impact on the business’s ability to derive scale benefits.
He says that less than six months after the Diverger acquisition Count has already realised about $4 million of cost savings, up from the $3 million flagged at the time of the deal. Further effects of the acquisitions and associated corporate activity will be revealed when the company announces its full-year results to the ASX at the end of August.
Humphrey says that GPS Wealth and Merit, Paragem and Count have had “different legacies and relationships and experiences and things over time, and so we’re really, really mindful, and have been very, very clear that we will sustain and grow and actually probably deepen those communities”.
“We’re not trying to build a generic service layer,” he says.
“We’ll build centralised services, but the way they get deployed into those communities will depend upon their priorities and what’s right for them.
“We’re very, very focused on our adviser-facing teams [being] distinct – so the Count AFSL has some practice development managers and licensee leadership that is distinct to the GPS team, is distinct to the Paragem team, and that’s because the demands and the needs of those advisers and the value propositions of the licensees are quite different.”
