Are you a specialist operating out of Macquarie St in Sydney’s CBD or are you more like a GP in a local medical centre? Are you managing a patient with ongoing blood pressure concerns, requiring you to visit once a quarter or are you writing a script for Amoxil to clear up a bad case of the flu and you see this patient once in a blue moon?
All advisers must find the courage to admit that they’re not the centre of the average Australian’s universe. This privilege remains the domain of accountants and to a lesser extent the mortgage broker that gets to work with them on their latest beloved property transaction. For this reason, clients have not and will not bang down our door.
It is my view that advisers must look to their dealer group and their value proposition for the answers to this problem.
If you utilise their expertise correctly, good dealer groups will define whether you become a niche adviser working with accountants or whether you provide simple advice to a high volume of clients.
Those that believe FoFA is simply a bad dream that will vanish so long as Mr Abbott becomes PM are wrong. With the combined impact of Fee Disclosure Statements, the banning of conflicted remuneration and Scaled Advice (all of which have the support of the Coalition), your local bank and industry fund will be in a better position than ever to attract those clients with a desire to transact at a price point that would make Aldi blush.
Equally, those financial advice businesses that service clients with complex needs and require ongoing advice will see their business grow and prosper, as the awareness of SMSF and other financial complexities continues to expand across our great land.
To survive FoFA you have to look honestly at the number of new clients you have seen over the last one, three and five years, and ask yourself what your profit and loss statement would look like if the recurring revenue wasn’t there, or if it was reduced by up to 50 per cent in five years’ time.
If your current business model is not sustainable without the same amount of recurring income, you need to decide whether you are going to be a specialist or a general practitioner. Are you going to be in the business of giving complex advice or simple advice? What does your ideal client look like?
After you go through this decision-making process, discovering where you see yourself fitting in terms of the marketplace, you will need to assess whether or not your dealer group can appropriately support you in that segment of the market.
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Anne is the founder of My Dealer Group, a consulting business that specialises in building profitable advice businesses.
Anne has 15 years financial services experience and has worked for premium brands such as BT, Colonial First State and ING in the Qld, NSW, Vic and the UK markets.
