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The best advisers are building their own boats, while others are clinging to life rafts

For advisers looking to take their business to the next level, the financial year 2022 just may present more opportunities than obstacles.

While this article may come across as relatively direct, I’ve found that in life being direct is the best possible way to help people. And I speak from experience here. Direct feedback and coaching from some of the industry’s best, the likes of David Haintz included, have helped transform my life.

It’s shifted me from someone who had an extremely limited view of my own potential, to someone who has been able to break through every metaphorical ceiling to now have a limitless view of my own potential.  

I thought it best to be 100 per cent honest when sharing what I see as the biggest challenges, and on the other side of the coin, the biggest opportunities for advisers in FY22. And the best part is this, it’s ultimately your choice as to whether you see them as the former or the latter. Allow me to explain.

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As of 2021, there are three kinds of advisers who exist in the industry today:

  1. Those who have embraced mandated change as an opportunity to reinvent themselves. 
  2. Those who see themselves as victims of the royal commission and are waiting for their licensee to rescue them.
  3. Those who have put change in the too hard basket and are jumping overboard quicker than passengers on a sinking ship.

Leaving aside those in category 3 for a moment, this classification is what sets apart practices that are thriving from those who are standing still, or in the worst case, moving backwards. And as the saying goes, if you’re not growing, you’re dying.

But before we take a look at the biggest opportunities, let’s take a look at the biggest challenges.   

The biggest challenges for advisers in FY22

  • Difficulty meeting compliance requirements, meaning advisers are spending more time on paperwork and less time building and maintaining client relationships
  • Increased education requirements resulting in more and more advisers leaving the industry, even those with decades of experience 
  • The necessity to increase fees to maintain profitability proving a significant barrier for existing client retention and new client acquisition 

While some practices are viewing these as insurmountable challenges, the most successful practices we work with are conversely viewing them as infinite opportunities to build a better business. 

Enough of the negatives, let’s take a look at the opportunities.     

The biggest opportunities for ‘limitless’ advisers in FY22

  • Successful practices of today have transitioned from “jack-of-all-trade” operations, to professional enterprises that have the right people doing their highest-value work. This may include outsourcing low-value tasks like compliance, ensuring advisers invest the lion’s share of their time in client relationships 
  • With advisers leaving the industry in droves, there have never been more book buying opportunities. Whether you are a solo-adviser practice, or a multi-location advice group, a growth through acquisition strategy can be a phenomenal way to boost revenue and profitability
  • Instead of being afraid of losing clients by raising their fees, the best advisers are using increased communication to not only educate existing clients on the cost to serve implications of the royal commission, but also as an opportunity to build better relationships  

The importance of point number 3 cannot be understated. It’s the thing most advisers do the least and it’s also the thing clients value the most. Further, investing in regular client communications ensures that when you do communicate things like fee increases, these will be viewed with context to the value of the ongoing relationship you’ve built with your clients. 

As former Shadforths director David Haintz highlights in The Life-First Advisor “by staying in touch you remain relevant”, adding that regular client communications gift the adviser an opportunity to “provide your client with some important non-financial information they’ll also find valuable.”

I’ll admit the only catch when it comes to capitalising on the opportunities outlined above, is the requirement to invest. Whether that be on people, training, or systems, the buck now stops with you as a business owner.

No longer are licensees there to provide us with everything at no cost. The funding licensees once relied upon to subsidise the cost of training, support, and guidance from industry experts have well and truly dried up.

To that end there is really only one distinction between those advisers whom I see thriving in this new era of advice, versus advisers who will eventually join those clinging to life rafts: a willingness to invest in great guidance and support for you and your business. 

You’ve taken the time to read this article, thank you. But to be honest the thing that matters now is what you do next. Which path are you going to choose?

Daniel Brown, chief executive, Coastal Advice Group

The best advisers are building their own boats, while others are clinging to life rafts
Daniel Brown
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Neil Griffiths

Neil Griffiths

Neil is the Deputy Editor of the wealth titles, including ifa and InvestorDaily.

Neil is also the host of the ifa show podcast.

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