In the process of courting, stories are told and promises are made. This is very true of dealer groups courting prospective advisers. Below are a number of promises dealer groups might make, all of which, I encourage advisers to validate before signing on the dotted line.
Leads
Only employed advisers, particularly those in banks and super funds, can expect to grow their client numbers by leads generated for them on behalf of the business, and even then business development is an important KPI.
Some dealer groups have developed strategic alliances with corporate and industry funds. These alliances are important in promoting full advice services to their employees and members, as well as, generating leads as a value add to firms within their network.
These alliances should never be seen as a reason to join. The responsibility of business growth in the self-employed world will always rest with the person looking back at you in the mirror.
REFERRAL PARTNERS
Dealer groups with multi-disciplined professionals in the fold, such as mortgage brokers or accountants, can provide a fantastic opportunity to grow your business via qualified client referrals. But while being part of the same ‘tribe’ helps to remove some of the roadblocks, the ‘golden ticket’ of getting referrals comes down to two professionals trusting and respecting each other. No dealer group can ever create that chemistry.
My advice is to meet with the prospective referral partner(s) put forward by the dealer group, prior to joining. Ensure both business models align and that they are the kind of people you would like to have a beer with – the best test of all to validate successful business relationships. Only upon having a face to face meeting with the key people, will you know whether a professional relationship can work.
Dealer groups may decline this request out of desire to protect their IP and competitive advantage while courting you. My advice to dealer groups is to trust the adviser before the agreements are signed. If you feel uncomfortable introducing this prospective adviser to a referral partner in your network due to them potentially misusing this introduction, then the long term prospects of them being a good match for your dealer group are not good.
ACQUISITION
Some dealer groups are good at helping businesses grow via client book/business acquisition. My advice to advisers is the same as above. Do not join a dealer group based on the promise of having an opportunity to acquire more business once you have joined. Would you join this licensee if the client book or referral partner didn’t exist? If your answer is no, which is perfectly reasonable, then ask the dealer group to respect your needs as a business owner, and undertake due diligence to ensure the commercials stack up.
Like the argument of living together before getting married, it is better both parties find out all the facts, before the contracts are signed.
As founder of Pinnacle Practice, Anne’s vision was to build a business that provided personalised and tailored advisory services to financial planning firms, licensees and financial services related product / service providers in order to help them achieve their growth objectives.
