An optimistic shift is occurring among financial planning practices as their focus moves from client retention to client acquisition, according to Rod Bertino (pictured), principal of practice management consultancy Business Health.
Bertino said one of the differences between 2010 and 2011 would be that financial planners would see more opportunities for client growth, despite the challenges the industry continued to face.
“There will be challenges, obstacles and issues, but on the same token there will be opportunities,” said Bertino. “The need for advice is as strong as it ever was and will continue that way for the foreseeable future. Good businesses thrive in any market conditions.”
He said most of his own clients had client acquisition as their part of their plans, and this varied from firm to firm depending on what their longer-term strategic plans were. Bertino agreed that there had not been such a focus on client acquisitions in the past couple of years due to the pressures businesses were under, but he sees that changing.
“Growth is an issue for a lot of practices out there. They’ve done an extremely good job at keeping what they’ve got and putting their arms around their key clients,” he said. “In a business sense they’ve done well at managing their businesses — perhaps they’ve cut costs and they’ve looked at different ways of being effective and productive — and generally speaking most practices have done that extremely well. Now as we look forward they have to keep doing that but they have to look at growth as well.”
Bertino said financial planners certainly had the opportunities, since client satisfaction surveys of over 40,000 clients revealed that 86 per cent say they would happily refer their adviser. It was therefore up to advisers to make the most of those opportunities and ensure that clients were encouraged to refer, Bertino added.
Bertino said it was important for advisers to remain focused on their goals over 2011 and not get distracted by other pressures, such as regulatory change and increasing compliance. He said the way to do that was having a business plan so that advisers do not get sidetracked. Added to this was having a trustworthy person external to the business who could hold them accountable, such as a business coach or even a referral partner with whom they have a good working relationship. Bertino said that when those two things were in place, businesses have shown to be 94 per cent more profitable.
He added that now was also a good time to survey clients and use their input for the business planning process.
