On the back of a national study of back-office advice operations, Elixir Consulting founder and managing director Sue Viskovic said that culture is a powerful profit driver when it comes to running a successful financial advice operations team.
Along with Lana Clark, senior consultant at Elixir, Viskovic presented the research to members of the recently launched Colonial First State (CFS) 10X community, which is designed to support financial advice practices to grow their business.
The research identified strategies advisers are currently using to achieve sustainable growth and success.
“Building a strong and empowered team is crucial for adviser success,” Viskovic said.
“By fostering a culture of shared ownership and appreciation, advisers can unlock significant growth potential.”
She told advisers that sharing the success with your team through bonuses linked to overall firm performance, adding that involving them in strategic planning can also boost profitability.
Elixir found that those practices that involved their team in strategy and improvement planning experienced an average of 25 per cent earnings before interest and taxes (EBIT) compared with 20 per cent for those practice owners who did their strategic planning on their own.
“Our recent webinar highlighted a key finding: While an average EBIT (profit margin) of 23 per cent might seem typical for financial advisers, we believe it falls short of the true potential. Our goal is to empower firms to achieve a significantly higher average EBIT, closer to 34 per cent, to reflect the value they deliver,” Clark said.
The research, which surveyed over 170 financial advice firms across Australia, found that businesses with a culture score of five on a five-point scale achieved an average EBIT of 24.2 per cent, compared to 19.6 per cent for those with a score of three or less.
Commenting on the research, CFS group executive distribution Bryce Quirk said streamlining operations is crucial for advisers looking to free up valuable time and resources.
He pointed to Elixir data that found businesses with documented processes achieve an average EBIT of 24.8 per cent compared with 19.5 per cent for those without.
“This research is hugely valuable to advice practices that want to optimise their processes to drive profitability,” Quirk said.
“It is also great to see the material impact that expert support, coaching, and continuous learning are having on the bottom lines of Australian advice businesses.”
According to the study, firms that either currently have or previously had a coach achieved an average EBIT of 26.3 per cent, compared with 22 per cent for those without a coach.
“By implementing these key takeaways, financial advisers can create a more efficient, profitable, and rewarding work environment for themselves and their teams,” Quirk concluded.
