In a podcast with Netwealth chief executive Matt Heine, Viskovic, general manager of consulting at Vital Business Partners (VBP), explained that while being a skilled financial adviser is important, it doesn’t necessarily equate to being an effective business owner when setting up on one’s own business.
“Make sure you know what it is to run a business, because being a good adviser doesn’t necessarily mean that you’re a good business owner. They are two different things,” she said.
“So I think just be really, really clear on what it is that you’re trying to achieve. Understand all of the machinations of a business as in your pricing, your business strategy, your operations, what kind of resource network you’re going to put around yourself and plan out how you are going to get to scale as quickly as possible.”
Another crucial factor is scaling up the business, Viskovic said, otherwise, advisers may become overwhelmed by administrative tasks and unable to focus on their core skills, where they truly add value.
“Without that planning, you will end up just getting to be a really, really busy adviser who’s got a massive risk in your business. If something happens to you and you are the only adviser and you can’t see clients for a little while, you’re going to be in trouble,” she said.
“I’m not telling people to shy away, but do it with a business head, not an adviser head.
“When you’re an adviser, if it’s only you or you and one other person, you are doing $50 an hour things when you should be earning the $400 an hour, and it’s very difficult to get out of that rut.”
However, she acknowledged that bringing on extra staff does entail extra costs initially, which may deter advisers especially if the extra staff are not generating revenue.
Viskovic said: “Often, as firms start to scale and when they’re younger, they’re smaller and they’re putting on their first, second, third adviser, that’s a big cost relative to the turnover that they’ve got. And too many firms I see do that without really good structure around client acquisition and deployment of services. So they have a big dip in their margins before they can get to a size and scale of growth.”
She recommended hiring a practice or general manager as a key strategy to manage this, noting it can be a “massive tipping point” for a new business. While not involved in giving advice, such a manager helps ensure the business operates smoothly, allowing the owner to concentrate on providing advice.
“They’re not the one giving the advice to clients, but they are ensuring that all of the operations are running really smoothly. They manage the staff, they manage the systems. That is when you can really start to get traction in a business and you do need scale to be able to do that.”
