Financial adviser businesses have long term growth challenges - we diagnose and solve


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Financial adviser businesses are often profitable and stable but commonly small in scale. Their owners want them to grow but they might be stuck - we look at why and explore how to break out of the high income but small business trap.

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Financial adviser businesses have long term growth challenges - we diagnose and solve

  1. 1. Adviser Businesses Building a Long- Term Relationship 6 October 2014 Russell Hutchinson 1
  2. 2. Background To Review Recently helping advisers with business valuations we found: • The experience is awful. A mess. Ad hoc, incoherent, unreliable, 2 unprepared • Does not reflect well on your business. • Does not support you in your bid to forge long-term relationships with advisers Business valuation is only one aspect of a system in which we talk about long-term, quality, and sustainability, but act in a different way. We think it is time to change that
  3. 3. Why Financial Advisers Are Often “Stuck” Although they typically earn a high income they are often unable to grow See commission as limit 3 Too Small Low Growth Low Efficiency Low Investment Risky Can’t Recruit Spend all they earn Fear Hard to see this
  4. 4. Insurers Are Not ‘Walking the Talk’ They say… …They do Quality is important …pay most for new business, report on new business every day, and quality quarterly, and business value – only when asked 4 Long-term relationships preferred …spend time hunting new relationships Existing business retention is critical …systems are geared up towards gaining new business Advisers think short term …are always focused on short-term sales and growth We think long-term …but act short-term with sales incentives, changes to non-medical limits, commissions, offers, and targets
  5. 5. Advisers Are Not Walking the Talk They say… …They do I don’t churn But many replacements initiated by an adviser have little or no comparative rationale 5 I want a business partnership Advisers have seven product supplier relationships I care about quality They have limited measurement, rarely decline a sale, or use spread commission, and have poor systems for after-sales service I want to build the value of my business But many do churn existing business, have little or no capital and low investment in advice-giving systems, or brand
  6. 6. 6 Industry Challenges For Insurers • Online information and activity proliferation • Low perceived brand loyalty • Low public integrity bias around agents • Agent attrition and ageing • Challenges in controlling sales process For Advisers • Good incomes • Can’t get past “an income” to “business owner” • Incremental recruitment doesn’t work • Outsourcing admin helps – but it isn’t leverage • Lack of skills: process, recruiting, management If you would like to address these challenges with some innovative new approaches, call us.
  7. 7. Unhappy Valley – Recruitment Trap 7
  8. 8. Problems and Solutions - Overview 8 Micro-business – low investment Leverage the work of others – build a team Scared to Invest Build a marketing engine and referral network Poor systems for advice & retention Develop a professional administration on a single platform Poor Management Poor Retention of clients and advisers Coach in business management, measure, and support Create a locality brand that dominates the market in a few square miles There have been very few deliberate, systematic, efforts to transform adviser firms in this way. What approaches have been made, have had substantial limitations.
  9. 9. Thank You! Visit us at Please remember that this material is © Copyright held by Chatswood Consulting Limited Connect with us via LinkedIn or Twitter 9 9