The most profitable and effective financial planning practices globally are savvy marketers who spend around 80 per cent of their time in front of clients, and focus on “asset gathering” not asset management, according an Australian delegation who recently returned from North America.
The group, which included Treysta Wealth Management adviser Mark Nagle, Implemented Portfolios managing director Santi Burridge, and Implemented Portfolios practice development manager Katie Gill, recently returned from a self-funded trip where they visited some of America’s top independently-owned advice firms.
Burridge, who is also a director of Treysta Wealth Management, said the best advisers in the United States outsourced investment management because they recognised early on that they were not great at picking stocks or managed funds, or asset allocation experts.
He said divorcing advice from investment management released them to build sustainable, scalable business models.
“They worked out that they were asset gatherers not asset managers, and they were brilliant at communicating what they were experts in,” Burridge said.
“The asset gatherer description is a business-to-business term and not one they use in front of clients but it’s helpful internally.”
Gill added that the best practices had crystal clear clarity around their value proposition and were able to articulate it to clients both personally and through the firm’s marketing materials.
Another observation that the group made was that the growing popularity of objectives-based advice was making traditional benchmarks redundant.
“The notion of performance relative to a benchmark or index is gone over there and all investors want to know is, will I reach my personal goals and objectives,” Burridge said.
Nagle said the new performance benchmark was the investor, adding that the exponential growth of the self-directed investor was an indictment on the financial services industry.
“There’s a huge dissatisfaction and natural suspicion of financial advisers and that is reflected locally by the booming self-managed superannuation sector,” he said.
Nagle said top advisers also understood that they could generate better results for clients by setting and implementing the right strategy over selecting investments.
“There’s research which shows that what’s most important to clients is their relationship with their adviser followed by transparency, control and fees. Way down the list is performance,” he said.
While Nagle, Burridge and Gill said Australian advisers weren’t miles behind their North American peers, they all agreed there was dramatic room for improvement in the areas of technology, regulation, consumer education and customer-focus. Overall, they rated Australia moderate to poor on the global advice scene.
They observed that the independent financial adviser (IFA) channel in the US appeared to have more influence and a bigger voice in shaping the industry.
