The days of one-man band advice practices is over

The days of the one man financial adviser band is likely a thing of the past and the profession will end up with a number of different business models, according to an adviser.

VISIS Private Wealth partner, Chris Smith, said there was not enough time in a week for one adviser to service a profitable client base while also focusing on red tape and administration without sacrificing some quality of advice.

Smith said there needed to be at least one full time staff member for one adviser that was dedicated to compliance requirements.

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The staff member was needed given advisers need to write file notes, run compliance requirements, write advice documents, write financial planning advice, complete financial modelling, product comparisons, and administration.

“It is a time consuming activity. We use an external compliance consulting group as well because we just need extra expertise. Even though we believe we do it right and ethically make great decisions for our clients, you still need someone experienced with the compliance law to make sure you are compliant,” Smith said.

“We pay a compliance consulting firm that come in and work with us one day a week plus do all of our compliance administration make sure that our processes are efficient and effective.

“They pick up all the fee disclosure statements and opt ins, spot checks on the quality of the document to make sure they're compliant, and they give us advice on how to improve our documents and make sure that they are complying with the laws. So that's a fair bit of work.”

Smith noted there were still many ‘one man band’ operators that had their own financial services licences.

“A lot of them were one man practices licenced under different aggregators, or licenced dealers, and they might have got compliance support from those licensees. But all of the risk is resting with the licensee so those costs are going up as the licensee doesn't want to take the risk of having rogue advisers out there working unsupervised,” he said.

“So, I think that that's another trend against them. I think these one man operations won't be able to survive.”

Smith said eventually there would not be any massive advisory firms that had their own product and once the big houses were gone there would be smaller boutique practices of partners with underlying advisers and a team of support staff.

Though, he noted that if the corporate regulator ultimately required individual advisers being licenced then the landscape would change again and people could work for themselves or deposit themselves into an office with some shared expenses.

“But for that to happen, they really have to find a way to overcome the red tape issue or put a little bit of responsibility back on the consumers or change the rules about what advice is, what product advice is, and what you have to put compliance around,” Smith said.

“And then you would have to look at strategy advice and structure advice that would carve out product and advisers could then be able to provide advice on a cheaper basis.”




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Whether you agree or disagree with the view expressed here, at the very least, it is the opinion of an experienced advice practitioner. So there is value in that.
There have been so many opinion pieces on the Industry from people, just this month, you don't have any advice qualifications or advice experience whatsoever. Don't need the alarmingly uninformed and clearly partisan views of Dealer Group "thought leaders".

Interesting article from Chris. I was involved with him during his past life at Zurich when he was a BDM and I know him to be a clear, well informed and analytical thinker. I'm one of the advisers of which he speaks. I reluctantly agree with his opinion. The big end of town - you know, the ones who ASIC has hit with millions of dollars of bad behaviour fines (a pittance to them) - want free thinking and independent advisers gone and we are seeing the successful conclusion to this sweep before our very eyes. It will be complete by 2026.

Risk advisers will be gone completely and investment advisers will largely consist of fresh-faced young guys and girls in their early 20s, God luv 'em, clutching a bit of paper that 'qualifies' them to be trusted with 'Other People's Money And Livelihoods'.

Strange world in which we live when those who produce the most for society must seek permission to operate from those who produce nothing. Are you listening Canberra?!

I'm exiting this month, after 36 years and at least 10 years ahead of time as I'm disgusted that government clerks/ministers have seized control of our once-great industry and are rubbing the nose of client-best-interest in the dirt by forcing trusted and experienced advisers OUT just because, understandably, they cannot adapt to a uni style exam and study. Why is nobody calling for these same politicians to get similar qualifications for THEIR portfolios. ScoMo, Joyce, Shorten et al, they need to show us that THEY are qualified for their guaranteed taxpayer funded Friday paycheck. Yep, fat chance - they'll just go off and vote themselves another taxpayer funded pay rise this year. Disgustingly immoral, all. Surely THAT would be in Australia's best interest. Oh, sorry, yes, too much common sense being spoken there. These people are disgusting and should be abjectly ashamed of themselves!

A quick google reveals Chris's firm has 5 partners. I would suggest at that level he needs possibly an Area Manager, a State Manager and Regional Manager and support staff to support them and weekly and daily team meetings...quite happy also Chris for a fee to turn up to those weekly partner meetings to mediate the arguments too and provide business coaching....Now of course you'll need auditors that audit the audit staff too I'm guessing....oh just how did the one man/woman business survive. but hey there are some elements to what he is saying but I could apply that to five partner firms too.

Everyone is entitled to their own opinion - to be blunt the way the industry is going single advise firms will simply need to reduce client numbers and increase average fees. Single advice firms can still provide quality advice - will just be for the chosen few who can afford to pay for a bespoke / personalised offering. Appreciate this does not gel with the “affordable advice” mantra we have heard time and time again from Jane Hume but this is the outcome of the current approach to regulating advice. Deal with it and move on I say!

As a fully compliant and profitable ‘one man band’, I can quickly pivot my practice to meet challenges and opportunities along the way. And as fintech evolves, my efficiencies (and reach) will only continue to improve. All of this and a life beyond work - no office politics, no board meetings, no burnout - just the clarity of mind (and good health) to focus on what matters most.

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