With 2019 being a year of change and challenge, one would hope that 2020 was going to be an easier year for advisers, and the broader industry. And while the pace of change in legislation and education has definitely eased, we are all still faced with the fallout.
The slow move to more agile business models that comply with the future is far from being complete - and many predict that it will be a three to five-year journey to see that come to fruition.
As we move into the year, the team at NMP Education want to know the issues facing advisers that they most want answers to; and perspectives on. Which is why we are launching our latest survey to ask you what’s important.
We do so with a few statistics in mind that we picked up from the latest Business Health Future Ready V111 white-paper.
Firstly, advisers have less clients than ever before. What was once at the 1100 mark, has dropped to around 500. The high touch service model demand this and it makes sense. I suspect that few advisers have had time to think about how to differentiate their service offering to their most valuable clients - in fact Business Health tells us only 27% of advisers are planning to expand their service offering.
So where is the growth coming from? It’s impossible to take on too many more clients with raising overheads. So growing the existing client base makes sense. Yet only half (47%) of advisers have a clear and defined value proposition. Makes it harder to sell the need or expand services to existing clients.
Scale is what the practice of the future is all about, and according to the report, it’s about $2.5m in billings that started to see real profitability in practices. With so many practices billing less than that, that financial burden to keep the business going will be hard to sustain.
So the pain points for financial advice practices continue to be multiple. Another three to five years of hard work and pushing through. Better to have the right mindset around this rather than hope for better and be disappointed. Perhaps in a way the fires and climate crisis we have faced as a nation over this summer has put all that in perspective. Most people I talk to are not really enjoying business at the moment, and finding it all a hard slog.
Yet go on we must, and to make the best of things and look for the opportunities. Because it is usually in tougher times that new ideas, and new champions emerge. We are committed to bringing you more ideas and perspectives this year that help you look for an edge in a tough environment.
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