Transforming to serve 100,000 clients takes more than a rebrand

AZ NGA is on a multi-year journey to build an integrated, multi-disciplinary advice platform that can efficiently provide personal advice to 100,000 clients and dispense financial guidance to hundreds of thousands more.

Achieving this ambitious goal requires a completely different operating model to anything that currently exists. It requires transformational change. 

Transformation is a term commonly associated with caterpillars and butterflies and large organisations and governments, but not financial advisers.  

Any changes that have occurred in advice have been relatively small and incremental, focusing on compliance, portfolio administration and customer relationship management. 

Core technology and operating processes have not significantly changed in decades. Consequently, either has the size of advice businesses or the profession’s capacity to help people. While there are some large businesses, the number of recurring clients a single adviser can manage has hovered around 100 to 110 for the past 10 to 15 years, despite massive technological advancements over that period. 

In 2017, roughly 2.4 million Australians used a financial planner, based on research by Roy Morgan. At last count, that figure dropped to 1.9 million, according to Investment Trends. 

By any standard, that’s not good enough. In the context of approximately 2.5 to 2.8 million Australians racing towards retirement in the next 10 years, many completely unprepared and afraid, it’s unacceptable. 

Urgent action is required 

To deliver advice at scale and secure the profession’s long-term future, advice businesses need to grow and grow quickly. To do that, they need transformational change. 

But not just any business can enact transformational change. In fact, very few can. 

To address the advice demand and supply imbalance and narrow the advice gap, businesses need four essential ingredients: 

• Direct client relationships; 

• Scale; 

• Capital; and 

• Transformation capability. 

Until now, no one has possessed all four. 

In the past, large institutionally owned licensees had the scale and capability, but they didn’t have direct client relationships or real capital. 

Investment administration platforms have scale, capital and capability but, similarly, they don’t own the client relationship. 

Advice practices have direct client relationships but not the scale, capital or transformation experience.  

The industry’s dominant technology providers arguably have none of the above.  

Enter the advice platform. 

The term advice platform describes a large integrated national advisory business with a strong consolidated balance sheet. It is characterised by one advice process and way of doing things, underpinned by enterprise-wide policies, systems and technology.    

Advice platforms are trusted advisers to their clients and this broad, deep and close relationship is sticky, which not only makes advice platforms extremely valuable but strongly positions them to pursue transformational change. 

Ambition is not evil 

Some people may think AZ NGA’s mission to build Australia’s leading advice platform is overly ambitious and our growth targets too aggressive. They may not agree with our views on super firms, putting advice at the top of the financial services value chain and blending different types of capital to create the optimal shareholder structure and capital stack. 

Agree or not, no one can argue that advisers waste too much time on non-advice related matters. 

If the client experience is more or less a one-hour discovery meeting, a 1 to 2-hour advice presentation and a 1 to 2-hour annual review, that’s roughly five hours spent in front of the client annually. If the average adviser has 110 ongoing clients, that’s 550 hours spent on client-facing activities, leaving 1,250 hours on non-client-facing activities (based on 40 hours per week, across 52 weeks, accounting for holidays and time off). 

While it’s impossible to spend every possible hour in front of clients because everyone needs time for administration, managing people and, importantly, thinking and strategising, it’s clear that advisers need someone cashed up, capable and courageous to challenge the status quo, overhaul the current operating model and build a kick-ass engine that can manage all non-advice related matters including HR, finance, technology, cyber security, risk management and marketing. 

AZ NGA is focused on doing just that. Our transformation program is targeting a 25 per cent uplift in efficiency through the implementation of a common operating engine including automation and agentic AI. Over the next five years, our goal is to convert that efficiency into boosting the average number of clients per adviser from 127 to 155 and reducing the number of support staff per adviser from 2.2 to 1.7. 

Support staff will still play a critical role in the business, only their attention will shift from repetitive, low-value work to more challenging, interesting and higher value work. 

This transformation activity will significantly increase profitability and enterprise value. 

An unhealthy obsession 

Organisations that have embarked on transformation understand that setbacks and frustration are par for course. Common challenges include consolidating and streamlining systems and processes, budget and time constraints, data protection and privacy, and effectively using artificial intelligence.  

Staying on the course requires resilience, adaptability and an almost unhealthy client obsession. 

One of the biggest and most successful transformation programs in recent history was the establishment of Service NSW in 2013 to revolutionise government services. The government’s mission was to deliver a seamless “one-stop-shop” experience for all citizens across contact centres, call centres and digital. The six-year journey consisted of 42 projects and involved consolidating over 800 unique processes, supported by state-wide technological and cultural transformation. 

As a result of this ambitious plan, Service NSW is the national benchmark for Australian government services and is regarded as one of the best human-centred design transformation projects.   

No pain, no gain 

Real transformation is hard. It’s not just a little bit uncomfortable; it is painful, all-consuming and may even feel impossible at times.  

Transformation programs are complex and multi-faceted. They require total commitment, capability in many specialist fields, coordination and lots of capital.  

In the case of Service NSW, which involved the consolidation of hundreds of separate stores and operating models into a single agency, the government allocated $234 million in initial funding plus $736 million in transfers to cover daily operations and staff costs. 

While AZ NGA’s transformation program is nowhere near as large and complex, we are doing what no one has done before, and we are spending money that no one has ever spent before on transforming the advice process and client experience.    

We are doing this to close the advice gap, raise up the next generation of advisers, and build a business of significant capital value that is a great place to get advice, to work and to own. 

Paul Barrett is the founder and group CEO of AZ NGA.