Advisers confident of business health

Most Australian financial advisers remain confident about the health of their businesses, despite one of the most difficult operating environments in decades.

This was found by a recentAXAsurvey, which questioned 500 advisers at its recent expos on business fitness factors such as their business plans, client segmentation, use of information technology and succession planning.

Responses to individual questions varied, though all respondents rated their businesses as “being on track, but need to accelerate improvement with professional support to unleash their full business potential”.

Most confidence about business fitness was in the degree to which their business was “IT enabled”, ability to have a well-balanced lifestyle and use of well-defined business plans.

Charter Financial Planning national manager Bruce Birchall says, “The level of business confidence was encouraging and surprising.

“With much public discussion focused on what is presumed wrong with the financial advice profession, it is pleasing to find many practices are confident about prospects and quality of their operations.”

The areas where they felt the “least fit” were succession planning, customer segmentation and having relevant client value propositions.

Survey participants were asked to rank individual questions within broad categories or measures of business fitness on a scale of 1 to 5.

In the section on business plans, responses ranged from “have a basic business plan” to “current business plan is detailed”, and most said their IT systems were moderate to well-developed.

Improvement was deemed as needed for ability to segment their customers and provide a service offer that matched their specific needs. Most respondents said they had “informal” client segmentation activities in place, but had yet to progress from “basic” service offers for the segments.

Potential concern was also expressed over the degree to which businesses were principal dependent. Most respondents said their businesses relied on their presence. Organisation charts and position descriptions for most of the businesses surveyed were reported to be “outdated” or “informal”.

Birchall says, “The good news is that the need for business improvement is well recognised. The challenge is to ensure resources required to bring about this improvement are readily available and applied in an efficient manner.”

“There is clearly an appetite for information about the latest developments in marketing technology and processes such as segmentation, business planning and people management. This is characteristic of an industry that is in growing in both complexity and sophistication.”