This mortgage broker turned adviser found that diversification was not the key to survival, as compliance requirements almost gave him a nervous breakdown.
Rob Horner, founder of Jack Horner Financial Solutions in Baulkham Hills, has warned against trying to expand beyond your expertise, stating that we should "stick to what we do best" rather than eyeing the one-stop shop model.
"A few years ago I was persuaded that because of the natural synergy between what a broker does and what a financial adviser does, that should mean that I should become a financial adviser as well, which I did. Not so long ago, I threw in the towel and stopped being an adviser, because I think trying to be all things to all people is just too hard," he said.
"It's hard enough to be a broker these days with the compliance requirements and the knowledge requirements, so when you have the added layer of compliance and knowledge you need to be a financial adviser, I thought I was going to have a nervous breakdown. So I think the importance of sticking to what we do best is very important, and I think the benefits in my business have shown that to be true."
Rather than adopting a full financial services model, Horner advised focusing on referral relationships.
"Of course I didn't just leave my clients in the lurch as far as risk goes, but putting in place sensible partnerships to outsource that function I think is important," he said.
"We're all told diversification is the future, but I think the more we try to be all things to all people, the more we take our eye off the ball of what we're really good at."
Financial advisers and mortgage brokers: can you work together?
One-stop shops: the business model of the future?
Why financial planners and one-stop shops won’t work
Michael Summers on 19 Nov 2012 11:01 AM
Well said Rob! For some years I have been suggesting that a truly full service financial planning BUSINESS requires a minimum of three practitioners expert in various aspects of financial planning - these days up to five practitioners are required if you aspire to provide strategic advice in clients' Best Interest and to implement their plan. The business needs to offer genuine expertise in property, direct equities, risk, debt, structured products - and the list goes on. At the risk of offending old friends, any planner, no matter how experienced, who believes that he or she can offer truly expert and un-biased advice across the whole spectrum is dreaming.
Michael on 19 Nov 2012 11:56 AM
The headline is misleading. One person, one stop shops don't work. Accountant, financial planner, mortgage broker combined businesses can and do work for some. However it takes discipline and long term commitment, and is no good for those wanting to generate a weekly commission for themselves rather than a long term service offering with a long term income stream.
David Verster B.comm Dip Fp on 20 Nov 2012 01:23 PM
Its absolutely draining on ones energy to be all things to all people.Even telling intelligent clients you can do"
All"will know you cannot and they will loose faith in you!