Financial planning practices have increased staff numbers in recent years, but this may not be increasing the number of client meetings, according to research conducted by Business Health and Rubik.
The Future Ready VI survey found the average number of client facing appointments per adviser per week stands at just 6.3.
“On average, each practice in the country is spending almost $500,000 [per annum] on salaries, which for a small business, that’s a big investment in people,” says Rod Bertino, partner at Business Health. This translates into an average of around six staff per financial planning practice in Australia, up from 4.6 staff per practice in the 2010-2012 study.
The latest Business Health research drew responses from 328 financial planning firms, which were surveyed between December 2012 and December 2014.
Is staff investment delivering ROI?
Bertino suggests principals are not getting maximum return on their investment in human resources. “Are they getting maximum return on the investment? You overlay that with the finding that each adviser is seeing just over 1 client per day.
“We can’t help but wonder whether highly qualified (and ‘expensive’) advisers are spending their time on duties that their staff can do more effectively and at a less dollar cost.
“I know a lot of work is going to go into [winning and servicing clients] but just over one [client meeting] a day? Where are they spending their time? What is it that the adviser’s doing that some of these 4.9 other support staff could be doing?” queries Bertino.
Formal processes lacking from practices
He suggests a lack of formal processes to engage with and empower support staff may be one reason for a lower level of efficiency from financial advisers.
The study found that around 30 per cent of practices don’t have position descriptions for any of their staff, and 50 per cent don’t have specific performance objectives. It also showed 41 per cent of financial planning practices don’t conduct regular performance reviews or appraisals.
“As we consider the year ahead we believe that hiring, retaining and developing staff will remain one of the most significant challenges facing business owners today,” says Terry Bell, partner, Business Health.
Among other key findings around practice management, it showed one in four staff were not aware of the practice’s business goals, and 26 per cent of practices have not sought any feedback from their staff over the past year.
However, the study also turned up a number of positive statistics. Around 81 per cent of surveyed practices conduct regular team meetings and 84 per cent had reviewed staff remuneration within the last 12 months
Staff turnover was also reported as “relatively low” by 76 per cent of respondents, and 66 per cent stated the majority of their staff attended at least one business, technical or personal development program in the last 12 months.
