The financial planning industry is in a period of significant and unprecedented uncertainty which is impacting the value of financial advice businesses, according to the principals of Seaview Consulting, Bob Neill and David Fotheringham.
Confirming the bottom line of reports around the uncertainty generated by the Future of Financial Advice (FOFA) changes and the current Federal Election, Neill and Fotheringham said they believed the result would be a continuing decline in practice values, at least over the short term.
They said that this was because while some of the changes around FOFA would come to fruition, some would not and almost certainly some new changes would emerge over the next couple of years.
The two consultants said they believed that, for the first time in six or seven years, the number of financial practices for sale may actually outstrip demand as some owners opted to exit rather than make adjustments to the new regime.
However, they suggested that those wishing to build the value of their businesses should invest time in setting very clear and specific strategic plans with an implementation timetable.
"The successful business will be one that sets and executes its direction most effectively in a period of change. Running the business with adherence to sound business principles sounds straightforward but it does not happen by chance, so the reporting and management regime must be vigorous and appropriate skills applied to its execution," they said.
"Above all, maintain a focus on profitable growth, repeatable systems, and sound management. If practice owners do this effectively they will reap the maximum reward in what will be a vibrant industry in the future."
