Targeting the time-poor business owner market in advice

With less than one-third of Australian business owners seeing an adviser, Business Health has detailed how advice practices can target this underserved client segment.

Recent findings from NAB Private Wealth, conducted by CoreData, discovered just 30 per cent of business owners surveyed said they have an ongoing adviser relationship. Some 25 per cent said they use one, but only when required.

Another 7 per cent said they have seen an adviser in the past but no longer do so, 20 per cent have never used an adviser but may do so in the future, and 18 per cent never had an advice relationship and don’t intend to.

Despite the majority of this cohort not currently seeking guidance from an adviser, business owners are navigating challenges around succession planning and the intergenerational wealth transfer.

Meanwhile, Business Health data demonstrates that small business owners account for approximately 21 per cent of the average practice client base, with there being more than 2 million active small businesses in Australia, according to the ABS.

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“As we all know, quality financial advice delivered by a professional adviser can add enormous value to the owners of these businesses,” Business Health stated in a recent blog post.

To target the self-employed market, the firm first acknowledged this segment as being more time-poor and demanding than typical retiree clients due to the nature of operating one’s own business.

“Small business owners generally have less time to devote to their financial affairs and are far more demanding than employee or retiree clients. They have higher expectations and are less tolerant of substandard service.”

Ensuring back office systems and processes can efficiently deliver on time will allow advisers to be successful in servicing these clients, Business Health said.

Additionally, self-employed clients are more likely to demand a broader range of services beyond pure financial planning to meet their varying needs.

“The needs of most small business owners extend well past the traditional product offerings of most practices. Self-employed clients often value referrals to other professional service providers.”

As a result, advisers were encouraged to broaden their professional network with specialists including accountants, lawyers, insurance brokers, and lending suppliers.

Business Health added: “A strong alliance/referral network is critical if advisers are planning to successfully target this market. While it is generally not expected, any referrals you can provide to your small business owners are also much appreciated.”

The need for advisers to expand their professional network has become more apparent across their broader client base.

Last month, CoreData research highlighted that advice practices are offering a range of services beyond just advice to diversify their service offerings, with mortgage broking being the most common.

Some 29 per cent of firms provide mortgage broking services in-house, while the majority – 54 per cent – refer clients externally to a broker, reinforcing the critical role professional networks play in financial services.

The research house also found 64 per cent of these referrals come from advisers’ own personal relationships, while 36 per cent are through the firm’s relationships.

Other common services beyond financial planning include insurance broking (27 per cent), tax advice (24 per cent), accounting (22 per cent) and stockbroking (21 per cent), CoreData noted.