The brand battle: Institutional versus individual
Promoted by LaVista Licensee Solutions.
Brand power is shifting back to individual advisers in the wake of the Royal Commission. The only question now is the best way to build it, according to LaVista’s Mike Pope.
A powerful brand can raise an organisation above its rivals and help convince consumers to buy or act. However, a damaged brand represents a hurdle that needs to be repaired before customers even consider doing business.
Many small advice businesses operating under an institutional AFSL now stand on the wrong side of this ledger through no fault of their own.
More than 120,000 advice customers have received compensation over the fee for no service scandal so far – a number which could easily triple – and many may never return to big brands run by the four major banks, Macquarie and AMP.
Those six institutions are now expected to pay more than $1.15 billion in compensation. Their brands, and their underlying licensees, have been severely damaged. Some will never recover.
The rise of individual licensing
Not surprisingly, a growing number of advisers are now weighing up the benefits of building and controlling their brand under their own AFSL. Compared to remaining at the mercy of an institution's poor decisions and reputation, self-licensing appears an attractive option.
The Royal Commission has inadvertently provided the impetus.
It recommended that financial planners are individually registered to encourage greater self-responsibility for professional conduct, whether they choose to operate under their own AFSL or as part of a larger licensee.
Individual licensing is standard practice among other professionals such as doctors, lawyers, and architects. A professional's own brand often matters as much as the organisation they work for.
For many small-to-medium-sized advice businesses, their personal reputation and the business name they have built are tightly aligned, creating a brand that is now rising in value.
Define your brand
An advice practice's brand is directly tied to its own core values. For many advisers, taking clients on a journey to create the lifestyle and achieve the goals they want is built on transparency, trust and empathy.
These core values are ultimately captured in the corporate (and adviser's personal) identity and the way the organisation communicates to clients. However, building this brand value takes time, because it ultimately rests on customer satisfaction and loyalty.
Client referrals are the first sign that a brand's value is growing. For a practice operating under its own AFSL, that rising brand value is solely owned by the practice.
However, running your own AFSL – an obvious way to build your own brand – can also be expensive and introduce its own compliance and operational risks. Building a personal brand outside of an institution's umbrella requires a careful investment to maximise return.
Take the industrial back office but leave the big brand behind
Compliance support, adviser technology, research and technical services can make or break a practice. Clients don't see them working but they feel the impact when they don't.
Those back office support functions provide the foundation for tailored service and strong brand values to shine through.
Dealer services provided by a well-resourced company like LaVista Licensee Solutions can allow practices to build their own brand while avoiding the bureaucracy and reputational risk that comes with operating under an institutional AFSL. It is a cost-effective way to allow practices to build their own brand and recognises that many advisers will want greater flexibility in this post-Royal Commission advice landscape.
This formed part of our thinking when we launched LaVista Licensee Solutions, which leverages the infrastructure and resources of award-winning dealer group Matrix Planning Solutions.
Setting up essential services such as advice documents and templates, compliance manuals, education and training can take away from client-facing activities that build trust and brand equity.
Dealer group services can also provide compliance and monitoring of authorised representatives, technical helpdesk and software support, and even marketing resources to those independent licensees who want them.
At its heart, the advice business is about balancing risks, returns and personal goals effectively for their individual clients. A strong dealer group service can do the same for independent advisers, providing the springboard for them to build their own brand.
Could the dealer group services model be the right solution to help you focus more on serving your clients, and less on keeping your business running? To find out more, visit LaVista Licensee Solutions.
Mike Pope is Chief Executive Officer of LaVista Licensee Solutions. He can be contacted at [email protected].
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