It takes a lot of gazing and research for an adviser to find a dealer group with the X factor they are looking for, writes Anne Fuchs
$25,000, $80,000, $100,000 – these figures are not small change. You would think saving that amount of money on dealer fees would be the game changer. What I have learnt though since launching My Dealer Group is that money isn’t the be all and end all, and that in fact many advisory firms out there are seeking a business partnership with a dealer group that will short circuit a problem holding back their business. To put it plainly, they are searching for a dealer group with the X factor that strikes a chord with them.
Dealer groups I see prospering all have their own unique X factors. Some are brilliant at providing growth and succession planning support. Others attract advisers because they have established centres of influence that generate referrals for their network and others are brilliant at building innovative and customer-centric product solutions that enhance the adviser’s proposition to their client base. There are some advisory firms searching for a culture they identify with and of course many are only attracted to saving money on dealer fees.
In saying all of that, in my experience it takes a lot of navel gazing and research for an adviser to find the X factor that they are looking for. Usually the seeds of dissatisfaction stem from little hiccups or misunderstandings and then snowball out of control to the point the adviser has psychologically checked out. Like an unhappy marriage, they go through the motions at home but are secretly out in the market looking for Mr or Mrs Right. To demonstrate my point here are two stories where it took months of searching for these advisers to find the dealer group with the X factor they needed:
| Advisory Firm 1 | Advisory Firm 2 | |
|---|---|---|
|
Revenue
|
$450,000
|
$750,000
|
|
Staff
|
2 | 3 |
| Dealer fees |
$46,000
|
$80,000
|
|
Initial reason they start researching dealer group alternatives
|
Reduce dealer fees, better compliance culture, better SOAs |
Reduce dealer fees, broad APL
|
|
What did the shortlist of alternative dealer groups look like?
|
There were 2:
|
There were 2:
|
|
The X factor: who won?
|
The dealer group that delivered prospective clients.
|
The dealer group that delivered practice management and product innovation that the adviser believed were in the clients’ best interests.
|
So what is the lesson from these two stories? My advice to dealer groups is to remember why your network joined in the first place. What has been your unique X factor in the marketplace and are you still delivering on this promise? If there is the slightest hint that this could be failing then this is when advisers start shopping around and calling me for advice or researching options.
On a lighter note, I often wonder what the financial services version of X factor (Simon Cowell’s hit TV show) would look like. Who would the talent line up be? I certainly have some opinions on that … Vanessa, how about a new TV show?
