How to structure an advice business for the future – what can a dealer group do in support?

Considering the past decade and everything the economy and industry has experienced, with well-known brands and icons disappearing from the financial services landscape, that is a truly remarkable achievement.

Sentry’s appeal to advisers has been based on providing AFSL services to independently-minded financial practitioners at a price that is sustainable for all parties.

A fundamental principle of founder and chairman Murray Hills is that “all businesses and commercial relationships need to be profitable”.

So that was the past and present. Now for the future: what will the advice practice of 2016 and beyond look like and need to contend with?

Firstly, the end of the product era is almost complete, with FOFA, the LIF and legislation hailing big changes in education, ethical and professional standards for advisers.

The advice era and the entrepreneur are well and truly here and there is no going back to the ways of the past.

Unfortunately, many will be unable or unwilling to adapt to the new environment and they will be among a significant number preferring to sell their practice and exit the industry.

Advice not linked to product will see the provision of strategic programs dedicated to addressing the wealth accumulation, lifestyle/asset protection and retirement goals of clients in a way that is far more holistic, transparent and compliant.

For the advice practitioner, it will require new thinking and structuring of the business so that it is more robust and will maximise long-term financial outcomes derived from operational efficiency and resources dedicated to optimising the customer experience.

At the core of an advice business of the future will be performance indicators that underpin the highest levels of best practice. To be effective, the data must be tangible and measurable to demonstrate that its financial, operational, team and client satisfaction performances are of a high level – and they continually strive to attain those benchmarks.

The benefits of measurable benchmarks will be the framework of the enterprise that can then facilitate expansion, restructure, protection of assets, tax minimisation, facilitate easy succession planning and also cater for future growth aspirations.

Businesses that are prepared to benchmark themselves will also seek feedback from their clients by way of both formal surveys and informal measures to ensure that service delivery and expectations are aligned to the customer experience.

This also includes feedback from centres of influence and alliance partners.

Technology will continue to play a vital role – in fact, more so as leading practitioners understand and appreciate its role in operational efficiency and delivery of the highest standards of customer engagement.

Good client management systems that maximise the potential of the customer experience will be essential.

The post-FOFA customer experience will manage all interactions and experiences customers have over the course of their relationship with their adviser. As prospects move along the buying journey and ultimately become customers, they will interact with the practice in ways ranging from marketing and brand awareness, provision of advice and customer support/service.

The key to making these interactions run smoothly and keeping the customer happy is knowledge through a much closer and comprehensive relationship, with the customer utilising technology, outsourcing non-core functions and ensuring all internal resources are customer-focused.

As a result, these businesses will scalable – i.e. able to grow without the addition of more staff – and not be principal-dependent. In fact, they should be able to grow irrespective of who is in charge.

Administrative and operational processes are tailored to the business and there is a genuine performance service-oriented culture.

The practice has a business plan and all the staff understand it.

There is a good ratio of support staff to advisers within the practice that in turn enables advisers to spend the bulk of their time face-to-face with clients, prospects, centres of influence, alliance partners and networks.

The majority of clients are actively “engaged” and categorised as “active” and consistently register high satisfaction ratings in client surveys.

One of the most important columns of strength and outcomes that will be derived from the scalable customer-centric business is the succession plan.

Long before the principal needs to consider exiting, they can turn their thoughts to identifying and grooming a successor.

A board or advisory panel should be considered since it is an invaluable asset that can assist the principal to make the transition. Whether it’s a coach, mentor or a fellow owner who’s gone through the same experience and transition, it’s always beneficial to have outside help.

In summary, the practice of the future will be very clear about what it does – for example, assisting clients to organise their finances and protect their lifestyles and retirement goals in a way that gives them peace of mind.

Clients will have a better understanding of the finance sector and will be much better equipped and appreciate the meaning and value of money to them and in a way that is able to help them articulate their goals and aspirations and help them achieve those goals with greater certainty and less risk.

These practices will be respected and highly regarded for the value they give to their clients and the difference they make in their lives.

Staff will also be beneficiaries because their jobs will give them a greater sense of purpose and personal achievement as they share the same values and beliefs. It is part of the DNA of the business.

Finally, they will be financially sound and sustainable. It will be sustainability that will drive outcomes by recognising all stakeholders – a business is of no value to clients and staff if they can’t open their doors every single day.

What can a dealer group do to support the practice?

The dealer group in the modern era must be well resourced and able to assist and support practices will all aspects outlined above. It certainly won’t be a one size fits all approach or offering.

Independence of institutional influence and ownership will be a must and will be a beacon attracting advisers.

The dealer group principal(s) and management/support team must be industry professionals that are able to relate to the adviser and their unique/individual circumstances and aspirations.

The provision of resources and support services that will be available to practice owners to assist them to effectively manage risk. This will be an important consideration on an adviser’s shopping list when seeking to join a dealer group.

Sourcing, researching, recommending and supporting technology process and practices will be a major function of the dealer group as these will be key requirements for advisers as they seek to add efficiencies and effectiveness in all aspects of their businesses.

High on the list will be –

• Client review and relationship management
• Client engagement – both new client acquisition and on boarding as well as existing client retention

To sum up, dealer groups will be offering B2B partnerships and resources to help practices grow, operate more efficiently and increase revenue through compelling marketplace offers that will see them increase revenue streams from deeper and more meaningful client relationships and engagement. These are Sentry’s values and principles that have been the foundation for the group’s success and will be in the future.

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David Newman is the executive director & head of business solutions Sentry Group