There is plenty advisers can do to improve business efficiencies to increase profit, before touching revenue like changing fee structures, according to a panel.
Speaking at the Association of Financial Advisers (AFA) Evolve conference, David Kissane, Wealthpool Advisers director and financial adviser, said profitability was the only key to be a sustainable business.
“There’s two ways you can improve your profit – revenue and expenses,” Kissane said.
“Revenue for us basically comes from advice fees and the last thing we want to do is touch advice fees because that impacts the value of what we provide to our clients.
“We’re very much focused on our business efficiencies, which helps us with our expenses and that helps us sustain our profit.
“We’re not necessarily looking to reduce our expenses, what we’re looking to do is be more efficient with the resources we use so we can increase our capacity to take on new clients without adding expenses.
“There’s so much we can do around business efficiencies before we look at fees.”
Cate Americano, Inspiration Café founder, said client value proposition had been area advisers had been busy revisiting because of the regulatory changes in the industry which led to a drop in revenue and increase in expenses.
“As a result of that, sadly a lot of client relationships had to be terminated over the last 18 months,” Americano said.
“It was no longer viable for advisers to provide the advice which is completely the opposite of being more accessible and affordable.
“The last time we saw the complete overhaul of client value proposition, service offers and pricing was FOFA [Future of Financial Advice reforms].
“Advisers are reviewing the direction of their business and that perfect future client… and how much they can charge to be fair value.”