Planner problems continue in 2020

Vanessa Stoykov,  creator,  No More Practice

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.

 


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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Rod Edwards

20/02/20

I am also one of those advisers who is not enjoying the business. It is so difficult now that I do want to write any new business at all, even though I have 2 accountants that want to refer business to me. I am putting them off. I also have existing clients who need insurance and I am not wanting to implement this as there is far too much work to do to worry about it.

John Moreton

20/02/20

Responsibilities on individual advisers have been defined clearly in legislation. The new educational requirements that individual adviser must satisfy are significant. These are excellent steps in the right direction for our profession. We are fast getting to the point that advice will be separate from product supply. In this new age where we have high quality advisers providing high quality advice - we need to give them support. I suggest we're getting close to the time when - the compliance burden on individual advisers can be eased - and the hurdles that an individual adviser needs to go through to set up an AFSL can be relaxed. We will truly have a high quality profession when, not only do we have highly skilled, highly motivated advisers of integrity, but we have a legislative environment that regards them that way enabling individual advisers to get on with business free from the constraints imposed by product suppliers and other larger licensees..

20/02/20

Clowns in government have destroyed another great Australian industry that serves the people. We are not milk farmers so dont treat the Australian people like cows as the polititians did with the dairy farmers. Polititions did what the rich and greedy insurers and banks wanted them to do. They did not engage with the workers(financial advisers) but the insurers . How does an adviser get a say when the FPA and AFA are paid by insurance companies -total and utter conflict of interest Corruption corruption corruption Let the Financial ADvisers Burn Burn Burn just like the Government let the Country and Australians Burn .

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