New quality measures for Financial Wisdom
Financial Wisdom has introduced a new system of rating the strength of the practices within its dealer group.
Under the new framework, practices will be assessed on three categories. These are financial strength, relating to the long-term profitability of the business; quality of product, addressing the quality of advice given to clients; and business acumen, encompassing the systems employed to ensure the practice’s long-term success.
The measures carry a weighting of 40 per cent, 35 per cent and 25 per cent respectively, which contributes to an overall assessment.
The initiative, called Practice Quality, has been designed to help Financial Wisdom ensure its advisory practices perform better as businesses, and remove conflicts of interest from the dealership model.
“This system has one key objective and that is to improve the practice quality of our businesses and to show practitioners how to become business people. That’s what it’s about and those are the objectives we’ll be measuring its success against,” said Financial Wisdom general manager Paul Barrett.
Practices will be rated on a monthly basis, which will allow the system to also be used as a benchmarking tool.
“They’ll actually get a monthly measure. So what this now serves as is a really good benchmarking tool for the practices. It means they’ll be able to plot their progress every month against their peers, which focuses their attention on the key things that drive practice value,” Barrett said.
Financial Wisdom is initially looking to use the new scheme for conference qualification, but its use for long-term remuneration arrangements in the future is also being considered.
“Whether we extend it to things like buyer of last resort and other things all remains to be seen and we’ll consult with our adviser forum extensively on whether or not those are good ideas,” Barrett explained.
“Next year we are actually going to have a user pays conference … this ranking system though will enable us to subsidise the top 85 advisers if we choose to,” he added.
Financial Wisdom is now also offering practice members a three-tier service arrangement. The first level is based on a flat fee while the second is a fee-for-service arrangement where advisers can elect to pay for additional dealer group services of value to their firm.
The third level of service is a premium offering. Barrett added, “a significant part of Enterprise 121 now operates as part of Financial Wisdom servicing its top-end practices”.
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