Now’s the time to take a good look at your practice to determine where your preparations for doing business post-FoFA are falling short, argues one financial planning business consultant. And if you’re following the herd and making this classic business mistake then you’ll struggle to thrive in this brave new world.
According to DFK partner Terry Slattery, it’s essential to carry out what he labels a “skills and competency audit” to make sure that your time is being spent advising and gaining clients as efficiently as possible, rather than being tied up with inefficiencies.
“Look inside your business, and look at yourself, your partners and your employees, and be quite upfront about the skills and abilities that you have – and whether those skills, abilities and competencies are actually going to allow you to deliver the kind of services that you want to offer to your existing and potential future clients,” he told Wealth Professional.
It’s essential to make sure that what goes on inside your organisation fits with what you’re trying to sell to those outside of it, he adds. But all too often within financial planning practices there is a disconnect between these two key principles.
Mimicking the competition? Big mistake
“My experience, not just in financial planning, but right across small business, is that clearly defined strategies around what my business is and where I’m seeking to go are practically non-existent. People are often floundering out there; they’re doing what they’ve always done and tending to mimic what their competitors do, and that’s their business strategy,” he said.
“You’ve got a problem there if what you’ve done in the past is either now redundant or was never any good anyway. And, even if your opposition is good at what they do, you’re never going to get a sustainable advantage over them if all you’re doing is mimicking what they do.”
It’s also vital to streamline your back office systems and processes if you’re going to thrive in a post-FoFA environment, argues Slattery, as creating efficiency will become an increasingly important business priority.
“Basically financial planners are the same as my profession – accountants. We sell our time, and our biggest costs are typically wages and IT. And so it’s very important that you make the requisite investment both in human resources and in technological resources to have a platform that enables you to deliver your services as quickly as you can,” he said.
“In the financial planning space the two big costs are going to be people and technology. And if they’re your two biggest costs, they’re the things you need to concentrate on in terms of driving efficiencies.”
He believes, however, than when it comes to people it’s essential to take a “value maximisation” rather than a “cost reduction” approach.
“It’s about investing in the right people who are going to be able to deliver on what you want to deliver,” he said.
For more essential business strategy advice, keep an eye out for the launch issue of Wealth Professional magazine, which will be available in print and as an online e-magazine later this month.
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