{"id":52598,"date":"2020-10-16T08:54:41","date_gmt":"2020-10-15T22:54:41","guid":{"rendered":"https:\/\/riskinfo.com.au\/news\/?p=52598"},"modified":"2020-10-20T22:47:51","modified_gmt":"2020-10-20T12:47:51","slug":"ten-mistakes-to-avoid-when-deciding-your-advice-future","status":"publish","type":"post","link":"https:\/\/riskinfo.com.au\/news\/2020\/10\/16\/ten-mistakes-to-avoid-when-deciding-your-advice-future\/","title":{"rendered":"Ten Mistakes to Avoid When Deciding Your Advice Future"},"content":{"rendered":"<!-- Either there are no banners, they are disabled or none qualified for this location! -->\n<div class=\"header row\">\n<div class=\"intro\">\n<h3>Well-known industry services firm, Business Health, has recently released its list of the ten mistakes to avoid when it comes to deciding about the future of your advice business, and we thank the firm&#8217;s Terry Bell and Rod Bertino for the opportunity to share their collective wisdom with Riskinfo readers&#8230;<\/h3>\n<\/div>\n<\/div>\n<p><!--more--><\/p>\n<p>It\u2019s fair to say that there will be a good deal of soul searching, mirror looking and earth moving in the world of financial advice over the next few+ months in Australia. And advisers, practices and licensees alike will be thinking very carefully about their options going forward \u2013 this is certainly their \u2018where to from here\u2019 time. The recently announced purchase of MLC by the IOOF Group is the latest in the long list of disruptions causing many to ask (and hopefully answer) the really hard, sometimes uncomfortable but absolutely necessary questions. Do I:<\/p>\n<ul>\n<li>Stay with my current licensee<\/li>\n<li>Move to another licensee<\/li>\n<li>Apply for my own AFSL<\/li>\n<li>Exit financial planning<\/li>\n<\/ul>\n<p>The principals of Business Health have been down the disruption road on numerous occasions over the past 20 years and we\u2019ve been able to observe first hand what\u2019s worked and what hasn\u2019t. Here are some of the biggest mistakes we\u2019ve seen over these years &#8211; to be avoided at all costs.<\/p>\n<p><strong>1. Being rushed into making a decision<\/strong><\/p>\n<p>Sounds obvious I know but the fact is that we\u2019ve seen too many decisions made because of an externally imposed timetable. While it\u2019s not always easy\/possible to influence someone else\u2019s timing, the sooner you start the process (and allow yourself more time) the better. And if you\u2019re still struggling to decide, don\u2019t hesitate to ask for an extension.<\/p>\n<p><strong>2. As the proverb goes &#8211; more haste less speed<\/strong><\/p>\n<p>Not deciding your end game first<\/p>\n<p>The biggie. It\u2019s difficult (impossible really) to make a decision about your future direction, without having a crystal clear picture of where you want to be in say 3- 5 years\u2019 time. And that should address your personal\/family life as well as your professional\/business one.<\/p>\n<p>Sensible, logical and what everyone should be doing, right? Unfortunately this doesn\u2019t appear to be the case &#8211; Business Health\u2019s research over the years, has continually highlighted \u2018planning for the business\u2019 as a major weakness in Australian advice firms. Consider, only 34% of firms have documented their plans for the ensuing 12 months, while just 29% have formulated a 36 month view.<\/p>\n<p><strong>3. Not paying sufficient attention to the potential impact on your most valuable assets \u2013 your clients and staff<\/strong><\/p>\n<p>Any of the options outlined above, will invariably impact your clients and staff. It\u2019s a simple reality which has been borne out time and time again through our various surveys (clients and staff). Change can very quickly convert into concern for clients and staff.<\/p>\n<p>As such, we believe that a carefully thought out communication strategy and program is called for. Frequent, meaningful and positive communications, will go a long way to allaying these concerns.<\/p>\n<p><strong>4. Thinking that there will be no unforeseen cost<\/strong><\/p>\n<p>Changes such as these are often accompanied by additional costs. These could impact your financials, other resources and time management for example. And often overlooked \u2013 there will undoubtedly be a personal cost in one form or another.<\/p>\n<p>Recognise and budget accordingly.<\/p>\n<p><strong>5. Not focussing on the nouns, instead being seduced by the verbs<\/strong><\/p>\n<p>Simply put \u2013 is the licensee able and willing to support your future plans. For example, if you view aged care as an important element of your service offer going forward, how can your licensee assist you? If your concern is market reputation \u2013 what\u2019s been the track record of the licensee?<\/p>\n<p>It\u2019s our experience that, it\u2019s not what is said (or promised) that\u2019s important, but it\u2019s what\u2019s actually being done. How does the licensee deliver on the words that appear on its website, in its promotional material or are mouthed by its own managers? Returning to our aged care example \u2013 what\u2019s the proof that the licensee can deliver this capability. Perhaps there\u2019s an arrangement in place with a recognised third party aged care expert or maybe a qualified aged care expert has been appointed to the licensee\u2019s management team.<\/p>\n<p><strong>6. Being distracted by the cost, not appreciating the value<\/strong><\/p>\n<p>Licensee fee levels\/structures are relatively easy to compare and contrast and it\u2019s a natural thing to do. But we urge you to consider, not the quantum of the fee, but the value your licensee will be able to deliver to your practice.<\/p>\n<p>This has been a consistent finding from our client survey work \u2013 the fee their adviser charges them, seems to only ever become an issue, in the absence of the value they perceive to be receiving.<\/p>\n<p>If the licensee could prove that through their various practice development initiatives its practices had lifted profitability by say 20%, would it really matter that its fees were slightly higher than its competitors?<\/p>\n<p><strong>7. Not fully acknowledging that operating a financial advice practice is not the same as running a license<\/strong><\/p>\n<p>When faced with the need to change licensee, one of the alternatives invariably thrown into the discussion is \u2013 obtaining your own AFSL. I won\u2019t ever again be subject to an external owner; I\u2019ll have complete control over how I run my practice and so on.<\/p>\n<p>This line of rationale can be very appealing and for some, it can indeed be the most appropriate course of action. But the mistake often made is to treat the licensee operation as simply an adjunct, supplemental to the planning side. Nothing can be further from the reality. What will be your compliance framework for example? Will it be administered \u2013 manually or through technology? How many file reviews do you anticipate in the first year? And so it goes.<\/p>\n<p>Operating an AFSL is a serious business in its own right and will require significant commitment, resources and capability. The question for any adviser contemplating this action \u2013 assuming I have the skill required, how will it impact my advisory practice?<\/p>\n<p><strong>8. Delaying your exit planning<\/strong><\/p>\n<p>This is a very personal decision for most and to call time, isn\u2019t easy. But retirement will come to everyone and just as the adviser has during the course of their career advised and counselled clients to plan for retirement, they obviously will need to do the same for themselves.<\/p>\n<p>Use the recently announced extension to qualifications wisely \u2013 to prepare your practice for sale or transition. Just as the house owner puts a fresh coat of paint on their home, tidies up the garden and completes all those odd jobs that have been put off over the years, the practice owner should do likewise \u2013 before they start talking to the market. Determine just what it is exactly that you\u2019re looking to sell \u2013 is it a client book or stand alone business for example?<\/p>\n<p>Have any compliance glitches been addressed: is every client now being serviced through a fixed term agreement: does the CRM contain up to date and comprehensive data for every client; when was the last satisfaction survey conducted. And so on.<\/p>\n<p>Our latest data clearly indicates that there\u2019s plenty of work ahead for many \u2013 just 10% of firms currently have an effective exit plan in place.<\/p>\n<p><strong>9. Underestimating the time involved<\/strong><\/p>\n<p>Irrespective of the road chosen, it seems to us that Murphy\u2019s Law is ever present and lurking and even the simplest of tasks seems to take forever. Plan accordingly and always build in a time buffer.<\/p>\n<p><strong>10. Acting alone, without external input<\/strong><\/p>\n<p>As the 17th century English poet John Donne observed \u2013 \u2018No man is an island\u2019. For each mistake canvassed here, we strongly believe that an external voice (or voices) is needed \u2013 to ask the hard questions, point out the cold facts and to offer support, guidance and advice. Thereby helping you to avoid making the mistake.<\/p>\n<p>Let the soul searching begin!<\/p>\n<div style=\"background: #eaeaea; padding: 20px; margin-bottom: 20px; clear: both;\">\n<figure id=\"attachment_52600\" aria-describedby=\"caption-attachment-52600\" style=\"width: 150px\" class=\"wp-caption alignleft\"><a href=\"https:\/\/riskinfo.com.au\/news\/files\/2020\/10\/Terry-Bell-2.jpg\"><img loading=\"lazy\" decoding=\"async\" class=\"size-full wp-image-52600\" src=\"https:\/\/riskinfo.com.au\/news\/files\/2020\/10\/Terry-Bell-2.jpg\" alt=\"\" width=\"150\" height=\"180\" \/><\/a><figcaption id=\"caption-attachment-52600\" class=\"wp-caption-text\">Terry Bell<\/figcaption><\/figure>\n<figure id=\"attachment_52601\" aria-describedby=\"caption-attachment-52601\" style=\"width: 150px\" class=\"wp-caption alignright\"><a href=\"https:\/\/riskinfo.com.au\/news\/files\/2020\/10\/Rod-Bertino.jpg\"><img loading=\"lazy\" decoding=\"async\" class=\"size-full wp-image-52601\" src=\"https:\/\/riskinfo.com.au\/news\/files\/2020\/10\/Rod-Bertino.jpg\" alt=\"\" width=\"150\" height=\"180\" \/><\/a><figcaption id=\"caption-attachment-52601\" class=\"wp-caption-text\">Rod Bertino<\/figcaption><\/figure>\n<p><a href=\"https:\/\/www.businesshealth.com.au\/\" target=\"_blank\" rel=\"noopener noreferrer\">Business Health<\/a> is an independent organisation specialising in customised advice and solutions to the financial services industry&#8230;<\/p>\n<\/div>\n<p style=\"text-align: center;\"><a  class=\"vc_btn vc_btn-black vc_btn-sm vc_btn_square \" href=\"https:\/\/riskinfo.com.au\/adviserfocus\/\" >Back to Adviser Focus Main Page&#8230;\u00a0<\/a><\/p>\n<!-- Either there are no banners, they are disabled or none qualified for this location! -->\n","protected":false},"excerpt":{"rendered":"<p>Well-known industry services firm, Business Health, has recently released its list of the ten mistakes to avoid when it comes to deciding about the future of your advice business, and we thank the firm&#8217;s Terry Bell and Rod Bertino for the opportunity to share their collective wisdom with Riskinfo readers&#8230;<\/p>\n","protected":false},"author":3,"featured_media":52603,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6868],"tags":[],"class_list":["post-52598","post","type-post","status-publish","format-standard","has-post-thumbnail","category-adviserfocus"],"_links":{"self":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/posts\/52598","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/comments?post=52598"}],"version-history":[{"count":0,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/posts\/52598\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/media\/52603"}],"wp:attachment":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/media?parent=52598"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/categories?post=52598"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/tags?post=52598"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}