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This article is an excerpt from the newly released Resilient Advice Business Strategy Handbook 2023, authored by Elixir Consulting and sponsored by BT. Here, Sue Viskovic shares the key elements required to build the foundations of future successful advice firms.

We all know the upheaval that the financial advice profession in Australia has experienced in recent years, with many advice firms struggling amidst increasingly complex regulatory and legal obligations. Adviser numbers have dipped below 16,000 and it is widely predicted that this number has further to fall in the years ahead. Many who are left are suffering from ‘change fatigue’ and in desperate need of inspiration and the confidence to implement different business strategies.  

Yet there are also many firms that are growing from strength to strength, seizing the opportunity to innovate and achieve their business aspirations. There is tremendous commercial opportunity for those with a passion and ability to evolve, and Elixir Consulting is on a mission to share practical insights into the strategies that will build resilient businesses with a successful, sustainable future in advice.

CoreData research2 revealed in January 2022 that there are 660,000 clients in Australia who actively want a new adviser. The time has never been better for advice firms to achieve success, and yet there is little doubt that many of the techniques used to run advice practices in the past will not sustain tomorrow’s firms. We are about to release our Resilient Advice Business Strategy Handbook 2023, in which we share the consistent elements of what we see in resilient businesses that are achieving healthy EBIT margins and personal satisfaction in the current environment, and how they’re planning for tomorrow.This article shares part of the first strategy in the handbook. 

  • Strategic Planning   

True success rarely happens by accident. Regular, effective strategic planning is a core fundamental for firms looking to reach their full potential, and this is true for the micro business with a single owner through to mid- and large-sized firms. Rather than allowing themselves to stay caught up in the day-to-day intricacies of serving their clients, successful business owners set aside the time to do focused work on their business, in order to continually improve their outcomes, and the effectiveness of the work that is done in their business.  

The most successful firms conduct both strategic, long-term planning activities to design their business as well as tactical planning to define the shorter-term, immediate actions and decisions that ensure their goals are reached. They continually evolve and improve, adapting to a changing environment, and those actions are taken by all members of a team, not just the Principals. This planning helps them to avoid short-termism, where reactionary decisions are made on the fly, and enables them to make longer term strategic decisions with confidence.  

Effective strategic planning ensures that a firm has clearly defined their own unique: 

Purposea well-considered definition of why the firm exists; your purpose statement creates the emotional glue that binds your team culture, reminds you all why you turn up to work, and provides a guiding light to inform all of the decisions made in your business. Your purpose should be unique and authentic to your firm, it is not something that can be provided by anyone other than your leadership team. Whilst there are guidelines on how a purpose statement is crafted, there are no rules as to what statement is ‘best’. 

Vision – the anchor point of your plan is the Vision of what you’re wanting to build, a clear picture of what you’d like your business to become. Whilst you may not be able to define precise specifics of client, staff and financial numbers in 10 years’ time, you should be able to describe your vision in such a way that provides your whole team with a sense of direction and inspiration.  

As an example, are you building a 100-year company, or purely a vehicle for your vocation?  Do you intend to have a national or global footprint, or are you content to serve a smaller community?  Each option is perfectly valid, and yet the decisions and strategies for these different paths will vary wildly.  Where there are multiple owners, it is imperative that there is a shared vision for the future of the business.  We know that change can be difficult, and many people struggle to embrace it. When a team understands the end destination and their core purpose, it is far easier to create a culture of continual change and improvement.  

The average normalised EBIT of the firms who have a clearly defined vision for the future of their business was $485,888 per firm, compared to $370,803 for those without. *We share some statistics throughout the Handbook with the intention to enable firms to reflect on what is possible and inspire them to evolve, they are not quoted to be representative of the whole profession. We selected 48 firms for the sample set, representing a broad cross-section of firms with verified business information for the 2022 financial year. 

Values – are the guiding principles of how your people behave and ‘show up’ to serve your clients and the business. Your values should be deeply ingrained across your firm and provide a non-negotiable, indelible framework to guide behaviour, decision making and communication. 

Great businesses share their Purpose, Vision and Values with their team. They make them part of the recruitment and induction process for new recruits and keep them front of mind, regularly ‘lifting up’, out of the day-to-day tasks of the business and reflecting on their bigger picture.  

 In order to achieve the longer-term vision, effective tactical business plans are designed each year and will specify:  

  • Financial targets, including expenses and revenue split between different sources  
  • Client activity targets, ensuring that firms track and measure the deliverables they must complete to meet their obligations and client service commitments  
  • Qualitative improvement targets/goals  
  • Projects and activities they will complete in order to achieve the improvements they seek  

Plans are made to design the steps to achieve the vision, with an eye on the future and risk mitigation. Upcoming legislative change is planned for, along with sustainability measures, such as managing the age demographics of their client base, skill sets and capacity of the team (to handle the targeted growth). 

Ideally, the plan will be succinct and shared with the team. Resilient firms don’t just have ideas and strategies about how they might succeed, their great ideas get implemented! Projects and activities will be allocated to those responsible and have a reporting mechanism through which they can keep themselves accountable to the progress they seek. They factor in time on business projects when doing capacity planning for their team and where they don’t have the skills or capacity in-house, or for projects that don’t require a permanent skillset on the payroll, they engage outsourced providers. Elixir’s GSD Lab was established for this reason.

Successful firms track the performance against their plan on a regular basis, making adjustments if necessary – it is a dynamic plan rather than a static document that is designed and then forgotten until the following year. 

The Resilient Advice Business Strategy Handbook 2023 is sponsored by BT. To receive a copy, reach out to your BT BDM or contact Elixir Consulting 

Written by Sue Viskovic, this article was first published in Professional Planner Magazine on the 29th November, 2022.
Sue Viskovic is Managing Director of Elixir Consulting, a
specialist consulting firm that has been helping financial advisers, risk specialists and accounting firms to evolve their business to thrive through resources, coaching and consulting since 2007.