Most Australian advisers are currently absorbed in altering their business practices to comply with the new FoFA Legislation, and a particularly large issue is deciding on when and how to deliver their Fee Disclosure Statements (we now have a three-letter F word … the FDS!). We have heard of a number of advisers who are planning to post out all of their FDS's on the 1st of July, indeed some licensees are even suggesting this is a good option. It may have been suggested in the ASIC regulatory guide, but we think this is a dangerous strategy, and there are far better options that are still compliant with both the wording and the intent of the legislation.
When an advice business ceases to receive trail commissions it does not mean that they must stop receiving recurring income, and start relying on constantly winning new clients on a transactional basis. One of the most valuable components of advice businesses is the fact that they can generate recurring income from long-term relationships with their clients. It’s just that in a fee-based business, this recurring revenue may not be as ‘passive’ as it was in a commission-based business.
We are often asked by advisers to take a look at their pricing model and let them know if they “have it right”. This begs the question, “is there such a thing as the right pricing model?” The answer is “yes”, although what is the “right” model will vary for every firm. So here is a list of questions to ask yourself when considering whether or not you have got your pricing right:
There is an epidemic starting to invade financial advice businesses. It’s not FoFA, or the next marketing campaign by Industry Super Funds. It has far greater ramifications for the future of the practitioner-owned advice business, and it is being compounded by either a reluctance to embrace change, or a lack of knowledge on how to evolve and adapt. The Business Health Future Ready V report has revealed that the average profitability of advice practices in 2012 has plummeted from 28.5% in 2010 to 14.8% in 2012. Combine that statistic with another finding in the report, that the number of advice businesses with an effective Business Plan has almost halved, to an astounding low of 28%, and the future does not look good. Look a little deeper, and you soon realise this is more than just a problem, it’s a potential catastrophe.

Most businesses want to grow, and one of the ways this can be done is by acquiring another practice or buying a book of clients. In this episode Geoff Pritchard shares some of the important things to consider when considering an acquisition and in particular the traps...

Employing the right staff is one of the most critical success factors for any business. Aside from selecting the right people, there are also questions about when is the right time to increase your head count, at what point in your growth cycle do you employ more people, how do you keep them working to capacity – the list goes on. An alternative solution that can work for many businesses is outsourcing.
For a couple of years now, I’ve been meeting regularly with Scott Dawkins of Griffin Financial Services. Those of you who attended Elev8 recently will know that Scott was one of our speakers, and told an amazing story about WHY he does what he does.

A common challenge for advisers who have referral relationships with accountants is that they don’t get enough of the right kinds of referrals. This is particularly evident in businesses where the financial planning practice is located within the accountancy practice. In this, our Episode Two of...

Moving away from a commission-based or asset-based pricing model brings with it some exciting opportunities. When you no longer require a client to have a certain amount of assets to manage, you start thinking differently – you can now start thinking beyond the pre-retiree or retiree client. New markets such as the wealth creator, the small business owner, and dare we suggest it, Gen Y clients are suddenly viable client groups who have been historically poorly serviced by advisers.