Good foundations help weather the storm when creating a new practice

Building a solid foundation and cultivating strong networks are essential when transitioning to ownership of one’s own practice, particularly during times of upheaval in the advice industry.

Michael Zelencich has recently set up his own advisory firm, Keenan Financial Services, taking over from a retiring adviser.

Speaking to ifa, Zelencich said: “I had a pretty clear pathway three or four years ago around becoming an adviser and then in time buying into his practice.

“It accelerated a bit quicker than maybe I thought it would, but the foundations were there.”

Zelencich said those foundations are crucial when transitioning to running your own practice, particularly in a rapidly changing advice landscape. Rising regulatory costs, including the CSLR levy, mean that operating a firm is increasingly expensive, making careful planning more important than ever.

“Without that solid foundation it's going to be hard, you might end up starting $800,000 behind before you’re really able to start talking about making a profit with all of these costs out there,” Zelenchich explained.

A key foundation for Zelencich’s new venture was the established client base he inherited from the retiring adviser, providing a reliable income stream during the transition.

“I would’ve found it really hard without that established client base to springboard from,” he said.

Zelencich’s clientele, largely pre-retirees, also represents a growth market for advisers over the next five years, helping to secure the firm’s future.

Equally important, Zelencich credits the pre-existing business infrastructure and paraplanning support available through his licensee as central to his successful transition. His licensee helped navigate and anticipate future legislative changes and ensured essential compliance checks were in place.

This support freed him to focus on other aspects of building a new practice while continuing his work as a financial adviser.

When asked about the alternative of transitioning on a self-licensed basis, Zelencich was cautious. While self-licensing can offer flexibility, he said the upfront costs, compliance burdens, and risk make it extremely difficult in today’s regulatory environment.

“It's a more onerous approach and there's a lot more risk involved in being self-licensed… Cost is obviously another factor,” he explained.

“At the moment, it's a big thing that you need to be able to commit the time and energy to.”

For many advisers in 2025, the costs and time required to start a new practice independently would likely be prohibitive. Zelencich’s experience demonstrates that laying strong foundations, through a client base, robust infrastructure, and guidance from a licensee, could be the most effective way to build a successful advice practice in today’s market.