Adviser says sole practitioners wonder how to stay profitable

Ahead of the Adviser Innovation Summit 2023, Fitzpatricks Private Wealth practice principal Gianna Thomson said these concerns stem from burgeoning costs across several areas including personal indemnity insurance, licensing fees, and generation of statements of advice.

Ms Thomson — who operates as the sole adviser in her Canberra-based practice and has outsourced her paraplanning and client service officer positions — said her fixed costs are high compared to other professional services firms.

“If a sole practitioner’s costs are high, how do they make a profit without servicing hundreds of clients?” she asked.

“You may have to service 200 clients just to make it worthwhile. That’s why there’s a lot of questioning among sole practitioners at the moment.”

To combat this, Ms Thomson — who charges a fee for service — said she pivoted her practice significantly over the last few years to providing premium service and advice to fewer clients instead of a low-fee service to a larger client base.

She added that she works with high-income families and business owners aged between 40 and 70 in the accumulation phase. She also uses her knowledge in public service schemes to work with senior public servants.

“I focus on providing value,” she told ifa.

Her comments preceded a panel session at the Adviser Innovation Summit in June, where she will provide tips on how one-person advice practices could operate profitably and generate revenue over the long term while juggling their business with their family life.

Ms Thomson recalled that when she worked for a superannuation fund, she would charge lower fees to the 200 to 300 clients on her book.

“I’ve completely flipped it around in my business,” she said.

“I’m very selective about who I work with. I charge a higher fee and focus on providing a lot of value to fewer clients. I don’t focus on being the cheapest adviser. Instead of charging $3,000 per advice to 200 people, I’ll charge more to a smaller number of clients.”

She said she justifies her fees to her clients by explaining her value proposition.

As part of her service offering, Ms Thomson said she collaborates with her clients’ accountants, mortgage brokers, and lawyers.

“A typical financial planner might not necessarily engage with other professionals, but I do that to save clients time and the hassle,” she explained.

“I’m determined to make it work as a sole practitioner because I really enjoy being by myself. That’s why I pivoted my business to ensure it was possible.”

Developing heightened emotional intelligence is also key to providing a premium service or advising high-net-worth clients, Ms Thomson said.

“People aren’t going to be willing to pay you a higher fee to pick a few cheap exchange traded funds for their portfolio. They can do that themselves,” she said.

“It’s about helping them achieve their goals or run a business if they’re a business owner. For me, upskilling is about focusing on improving my emotional intelligence to be a better financial adviser. This has helped me focus on high-net-worth clients.”

To hear more from Gianna Thomson about how sole practitioners could run a long-term, profitable, and sustainable practice and overcome challenges along the journey, come along to the Adviser Innovation Summit 2023.

It will be held on 8 June at The Great Hall, University of Technology Sydney, and 15 June at Grand Hyatt, Melbourne.

Click here to buy tickets and don’t miss out!

For more information, including agenda and speakers, click here.