Finally, planners make profit

Vanessa Stoykov,  creator,  No More Practice

There is no denying it’s been a tough few years for financial planners. The fact that more than 6,800 have now left the industry is evidence of just that.

There is, however, a silver lining emerging for those planners running and owning their own practices – whether independently licensed or via a larger dealer group – and that is the ability to make more profit.

COVID-19, for all the hardship it is has caused, has created an environment that may just make advisers’ businesses more profitable, and their compliance and commute workload easier.

That environment is, of course, working from home and making use of technology. More than many other professionals, planners have embraced this wholeheartedly, and many reports suggest they have been in even more contact with clients than ever via video conferencing and working from home.

Naturally, profiting from this new environment won’t be an immediate outcome. Those with locked-in contracts on premises will need to look at how quickly they can change their model to keep their overheads low.

It’s always been a fact that financial planning carries a lot of hard costs due to things like compliance, and the cost of even opening a single client file (which can range from a reported $3,000 to $11,000). Nice offices that reassure the client, and the need to have face-to-face meetings, with only so many hours in a day, has always meant that clients needed to have considerable funds to be able to meet the fees planners charge to run profitable businesses.

This new working environment, however, means planners may be able to cut costs in a number of ways. And cutting overheads moving forward is probably the only way many of us are going to be able to make a profit – rather than increasing costs to clients, which is not realistic.

In a Zoom meeting with my adviser this week, he appeared in a very cool stone floor and wood office. I was immediate impressed and asked him where he was. He was, in fact, at home, and the background was a Zoom template.

He asked me if I’d rather see him in a real office and my immediate answer was no. He looked incredibly professional where he was, and of course he was happier as he was closer to his three kids and working from home.

It then occurred to me how much he could save if he were to permanently give up his premises. Not only rent costs, but travel, electricity, and perhaps even a PA to answer the phones and make the office work. Another bonus was that he was now using Iress technology via Xplan, which recorded his video meetings with clients and filed them as compliance meetings.

To me, this was an incredibly exciting step forward. At least 15-20% of costs on overheads could be wiped out if advisers can successfully navigate this process and permanently work from home.

While I understand working from home is not always ideal, there are plenty of opportunities to meet clients when times are better after COVID – in coffee shops and shared working spaces, for example. And with more profitable businesses all round, there will likely be more capacity to take the larger clients to lunch and really grow long-term relationships and friendships.

While we all face hard times ahead economically, I do hope many advisers can take advantage of the ability to lower their overheads and create more profitable practices. The work you do is essential and you deserve financial reward.

Until next time,

The opinions expressed in this content are those of the author shown, and do not necessarily represent those of No More Practice Education Pty Ltd or its related entities. All content is intended for a professional financial adviser audience only and does not constitute financial advice. To view our full terms and conditions, click here

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Paul Forbes


Hi Vanessa, I am seeing a lot of dialogue on this lately and I would absolutely recommend it to all advisers with high net worths, as that will mean far more quality clients for the rest of us. If you are a one man band with no support you can make yourself look good but if you are a good practice that has quality resources to support the client then you have just given up that advantage by making yourself look exactly like the one man band. It will then come down to who does the best zoom. To your argument, technology is definitely an enabler and yes zoom meetings are convenient and we use them regularly for reviews (plus face to face), but our advisers are sitting in business offices and looking like someone who is focused on the client in front of them. Their zoom meeting won’t be dropping out because someone in the house wants to watch Netflix or Stan. We spend a lot of time creating the right atmosphere for the client so that when they walk into our offices they know intuitively whether they are in the right place. I also have an office full of very bright, well-educated staff who are going to walk that client through the process, provide multiple points of contact and ensure they become a client of the business, not the adviser. For every adviser who wants to move home and provide an electronic experience then just remember who you are competing against - every other under-resourced price taker in the market. We can also talk about culture, productivity and accountability but that is a much bigger conversation. Needless to say moving everyone to a home office and convincing yourself you are delivering a better service because it saves costs is not the model I would recommend to an emerging profession.

johnny farquar


the cost is killing the adviser nearly 7,000 have been removed by this unfeasible sad unworkable mess. What a way to completely stuff up another once great Australian industry. Australian government has destroyed the "Financial Adviser" instead of doing a banking royal commission for what wrongs the banks have done like for example storm financial . Disgusting and I do believe corruption is strong within Australia if this can happen to this industry. Making people pay for advice will allow less Australians to get advice, Smart Government . So people with no insurance who get injured or sick can be assured to get paid by the NDIS which does not work anyway. Great put more pressure on a system that does not work. Competition is the big looser and the biggest looser of all is the Australian consumer who had advice for free now has to pay while the overseas insurers or company owners get richer. Redistribution of wealth in this country wipe out the middle class - polititions asleep at the wheel or just selling out to China

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