Segmentation key to business success, forum hears

Kate Cowling

By

August 9, 2017

The financial advice firms that will prosper in the next 10 years will be those with clear value propositions and a well-defined idea of the clients needs they wish to cater for, a forum has heard.

The opening panel session of the Professional Planner | Financial Planning Association Best Practice Forum heard a new breed of client would emerge seeking specialised advice and the planners poised to succeed would be those who could match those areas of burgeoning demand.

“I think it’s the client experience over the next 10 years that’s going to be substantially changed,” said Craig Banning, director of Navwealth.

Part of that means advice firms being able to say no to or refer on clients if there is a mismatch between the clients’ expectations and the advice firm’s area of specialty.

“One of the things the advice profession has got to grow up and learn is not every single client is our client,” he said.

“I think the biggest threat for anyone who is trying to be a generalist; trying to be a financial adviser for every type of human being in Australia,” he said. “It’s a dead model.”

Joining Banning on the panel, Grahame Evans, managing director of GPS Wealth, said when a business knows its strategy, structure, people and culture, the value proposition “pops out”.

“It’s a process that will show you what you’re good at and how you’re going to deliver on that,” he said.

Evans said firms can sometimes fall into the trap of setting their strategic objectives or area of specialty around what others in the industry are doing, which he said was a recipe for failure.

“You’ve got to consider what part you’re going to play and that part has to be where your core competencies are matching with a client need,” he said. “With that, I would guarantee it aligns with your values and belief system.”

Preparing the next generation

Other themes from the forum, which recorded a record attendance, included future proofing an advisory business and succession planning, as well as managing and attracting the right staff.

In an opening keynote, Financial Planning Association chief executive Dante De Gori said the consumer experience, the next generation of planners and the professionalisation of advice were the three core focus areas of the FPA.

In practice, that means active engagement with high schools and universities to attract new talent into the soon-to-be profession, he said.

The Professional Planner/Financial Planning Association Best Practice Forum continues Thursday, August 10 in Melbourne. Professional Planner would like to thank its sponsors, Colonial First State, Commsec Adviser Services, Praemium, Super Concepts, Vanguard and BT Financial Group, as well as its CPD partner Portfolio Construction Forum. 



Kate Cowling

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