There’s an arguable quote if ever I heard one…. “A change is as good as a holiday”. Whilst I would be the last to agree that I could get just as much fun from changing the car I drive or the clothes I wear as I could from a week on the ski slopes of the French Alps, there are a bunch of changes that I am indeed looking forward to. When it comes to the changes that many advisers are making in their businesses right now, I’d be the first to say that if they do them well, the result could be better than a holiday. Could in fact, put them in a position to take more holidays – and relax to enjoy them – more often!
Scrolling back through our article library I came across an article I wrote that was published in the AFA’s magazine, The Financial Adviser, where I commented that “For many advisers, the FoFA reforms will simply provide the impetus to get on with a change they’ve been contemplating for a while. Others will require a complete paradigm shift to first embrace the change, and then determine a way to create it within their business.”
Almost a year later, with the FoFA legislation now passed, and full implementation occurring in ten short months, it is heartening to see so many advisers have already changed the way they think about their businesses, albeit they may still be in the process of changing their business models. Arguably, it is the mindset of the business owner and adviser that will determine how successful they are in making the changes required. In many cases, those changes mean simply that they need to start running their business like a business. Although issues like pricing and value delivery are not foreign to many other businesses and industries, it’s an area that hasn’t required a lot of conscious thought in the past. Many advisers have focused on these issues, although they’ve done so by choice while their peers carried on in business with their minds on other things.
And that is why I think a lot of advisers have been resisting FoFA – not because they don’t want to provide value to their clients, or they make more money being paid by commissions, it is rather that they just haven’t had to focus on those issues before. Most advisers (certainly those I come into contact with) are advisers because they love helping people – they get a thrill out of solving complex financial problems to enable their clients to sleep better at night. They are offended by someone telling them that they are conflicted because they are paid in a way that has been dictated to them by the industry for decades.
It’s just the fear of change that has crippled many advisers and held them back from embracing the future. We’ve written numerous articles on managing change for industry magazines. Stewart wrote about the changes to client demographics, business models and the polarisation between transactional clients and advice clients in this article . I wrote a piece looking at how successful businesses evolve and prosper.
There is so much help out there for advisers who are willing to put up their hand. Of course, for some levels of support it also requires putting their hand in their pocket -but there is also a plethora of support available in articles, from licensees, even from sharing thoughts with peers. The first step is to mentally embrace the change and see the opportunities ahead. The right changes to a business model can reap significant rewards for advisers and their clients. And it’s so empowering for an adviser to make the mental shift to embrace the changes afoot and take back control of their future and that of their business.