The report, which covered a variety of professional services, highlighted the merits of five growth strategies, including people, acquisitions, succession planning, diversification, and technology and systems.
In terms of succession planning, the report found that 58 per cent of professional service firms do not have a plan in place, either formal or written.
“Succession planning is seriously lacking in professional services,” the report noted.
“While succession planning is often perceived as being linked to retirement, it’s also key to growth. That’s because a well-executed succession plan allows firms to build a mature, scalable and resilient business structure which has continuity in the event that the founders/owners are indisposed.”
NAB executive of professional services Kate Bain told ifa the benefits of succession planning goes beyond continuity.
“Businesses need to identify and develop the right talent early and create ownership structures that keep future leaders engaged. It’s not just about continuity; it’s about building a team that’s invested in growing the business over time,” Bain said.
“Succession planning has become more complex in financial advice over the past five–10 years as firms have grown significantly in size and value. What was once a collection of small practices has evolved due to rising regulatory and compliance demands with the increasing need to create scale to have a successful business.”
Importantly, she added, advice firms developing a succession plan aren’t just hiring staff, they’re “developing future owners who must understand both the technical and commercial aspects of running a modern advice business”.
The report also addressed the power of diversification in facilitating growth, with Bain emphasising the need for financial advisers who often specialise with niche clientele, to understand what customers want.
“What’s important is knowing your clients and building your strategy accordingly to fit your current business,” she said.
“Firms that serve medical professionals might naturally look to expand their offering into practice succession planning, while those focused on retirees might look to add an offer around aged care services.”
Understanding the needs of the clientele can help firms understand how to expand, whether that looks like bringing on advisers with specialities or forming partnerships with experts in those fields.
“Expanding your offering via partnerships and bringing in the right staff with the expertise required allows businesses to offer clients a broader range of services without the huge investment in time and training,” Bain said.
“It’s about creating a team where each adviser focuses on their area of strength, which benefits both the firm and the clients.”
