It’s time to reinvent: Shaking up your business model to scale

Being a financial adviser or private wealth manager today is challenging. Changing regulatory requirements, the new education qualification, manual compliance tasks and rising costs all result in a challenge to profitability and time-poor advisers.

At the same time, advisers do not always get the support they need from traditional supplier relationships. The model of partnering with multiple institutions to supply a comprehensive service can substantially add to costs, while potentially compromising consistency and quality of delivery.

Meanwhile many service providers within the private wealth management industry are exiting the business or reducing the level of service offered to smaller advisers, while failing to support practitioners’ greater transparency and control efforts. Many advisers are also exiting or consolidating as they struggle to scale up from a small base of clients.

Yet, there is a rise in demand for independent financial advice. According to a recent ASX Investor Study around a quarter of those who began investing in the past two years are under the age of 25. Over a third of this cohort said they would seek financial advice from a professional as they feel uncomfortable making investment decisions. A similar proportion of more seasoned investors agreed.

The 2020 Investment Trends Financial Advice Report also revealed that around 40 per cent of Australians plan to seek financial advice in the coming year as they look to experts to help them navigate the COVID recovery months ahead.

This is a huge opportunity for financial advisers and wealth managers.

To stand out from competitors and successfully grow your client base there’s a couple of steps to take that can reinvent your business model. The first step is evaluating how you can better meet client needs and expectations. Spending more time designing the right portfolios to help close the gaps in knowledge and access is key, as is offering customised advice. Clients are increasingly expecting more personalised services across all walks of life, including from advisers.

Secondly, look to low-cost, digital multi-asset solutions that can deliver greater flexibility, personalisation and options to clients. The fastest way is to tap into partnerships and fintech solutions to expedite the integration process while not inflating costs.

There are some important considerations when selecting a solution:

- Global capital market access and multi-asset offerings: Make sure the solution you choose allows access to global capital markets through multi-asset execution and custody. This will let you trade and manage your clients’ portfolios from a single margin account and execute trades across multiple asset classes, complemented by integrated custody, clearing and post-trade services.

- Digitised wealth management offerings: Automation of onboarding and consent processes will free up advisers to focus on investment performance where they can offer personalised and integrated digital client experiences, including helpful visualisation and analytics tools.

- Best practice compliance capabilities: Delivered across multiple jurisdictions, this helps reduce complexity and get increased security by monitoring risks effectively.

- Competitive pricing: Reduce long-term total cost of ownership by keeping pace with tech innovations and lowering ongoing capital expenditure with competitive pricing.

There is no better time than now to review and reassess your business model. By facing the challenge head-on, you will stand out from the crowd and have the option of scaling instead of exiting.


Adam Smith, chief executive, Saxo Markets Australia

It’s time to reinvent: Shaking up your business model to scale
Adam Smith
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