Advice practices should be focusing on business growth rather than concentrating solely on reforms, CountPlus believes.
CountPlus chief executive, Matthew Rowe, said the biggest challenge in the advice industry was “looking beyond the right here and now” as the past few years had led to a lot of reform fatigue.
“I think the biggest challenge facing advisers is having to think about a growth mindset. Over the last three to four years we’ve been in this war zone where advisers are getting smashed repeatedly by what’s been happening in our space,” he said.
“When you’re in that siege mentality, you don’t think about growth in your business. Professional firms are like bananas, they are either only growing or ripening, not both.”
Rowe said the growth mindset was thinking about what the business would look like in the next three to five years, what people were needed to achieve that, and what did the business need in terms of infrastructure, utilisation, and leverage models.
“Profitability within financial advice isn’t around products, rebates and subsidies, it’s now about how am I setting up a profit margin for a client, how am I have a leverage model with people and systems, and how am i utilising the resources that I’ve got to be profitable and sustainable in the future,” he said.
“Firms that are generating $300,000 to $400,000 in revenue are going to struggle to be profitable in the new world of advice – they’re going to need to double that. So, it’s about having a growth mindset and the strong firms are the ones that can scale up and they’ll survive the next lot of changes.”
However, Rowe noted there were huge opportunities in the advice industry given the fact that there would be less advisers but a growing unmet need for advice.
“Those firms that can get through the next six to 12 months have huge opportunities. I’d love advisers to look at the world a bit differently,” he said.
“Look beyond here and now and look at three to five years time which I know is hard because they’re getting smashed daily with all sorts of different things, but this is an exciting space to be in.”
On the efficiency side, Rowe said practices needed a tech stack and that there were a lot of fintechs in the industry that “are not more than a glorified spreadsheet”.
“If you break down your process – how your working papers work, your process at back end, even how much you can reduce the word count or text and advice document and generate efficiencies that’s the answer,” he said.
“It’s tech led but more importantly but led by your process review. But you can only do that when you have people in the biz that understand advice process and are willing to question and challenge how it’s always been done in the past.”
