Where will the industry be in 2017? We recently posed that question to our advisory board to gain insight on how they see their future business model.
If we believe the ‘generalist’ advice business is no longer relevant, what is the Professional Advice Business Model of the future? Is it niche specialised or large multi-disciplined and corporatised? Is it led primarily by the financial planning business, or the accounting business, or a combination of both? Is it driven by referrals or built around an in-house servicing model? Are they licensed through a dealer group or do they have their own licence? These are questions that are often asked and though the response is not immediately clear, it’s important to consider them as we position ourselves for an ever changing environment.
It would appear that the mass of regulatory reform we have seen through TASA, APES, the SMSF regulation and the removal of the Accountant’s Exemption is driving the convergence of the accounting and financial planning professions and therefore it would make sense that the advice business of the future would consider both professions in the mix. If the client is at the centre of the advice process and the reforms are ultimately about acting in best interest of the client, then who “owns” the client is irrelevant in relation to the imperative need to work collaboratively in the client’s best interest. If we understand the intent of best interest, then no one really “owns” the client and regulation just enshrines something that both accountants and advisers do, and have been doing every day.
So what is the role of the dealer in supporting both accountants and advisers to provide the Australian consumers with greater access to quality financial advice and to maintain and grow a successful business? At Securitor and Licensee Select, we believe that whether you are licensed through a Dealer Group or have your own licence, it’s not enough to just provide the basics. Things like compliance, technical, product and research, advice documentation are all hygiene factors and yes, while these are necessary to run a compliant professional advice business and for a licensee to ensure they are managing risk under their AFS Licence, they are not the services that truly make the difference.
What will ultimately set one licensee apart from the other is designing services that align to their business value drivers. Understanding the professional advice business as they transition through each step of the business lifecycle and the support they need to continue to grow along the way. For the adviser this means a combination of technical and sales skills and being great with clients. For the CEO it’s about having the right people in your business, following the right processes to ensure that there is a great client outcome that supports the financial goals of the business; and for the business owner it’s about understanding why you got into business, was it to support a certain lifestyle or to create value that can be converted into a liquidity event sometime in the future?
I challenge you to think about the business model of the future. What will your professional advice practice look like in 2017? How do you ensure you remain relevant and competitive?
