Speaking at Adviser Live 2008, managing director David Scarlett told delegates that they need to transform their practices into businesses.
He stressed that in a practice, the job owns the adviser. However, in a business, the adviser owns the job.
Scarlett said 90 per cent of adviser firms would not be able to run without the owner. He said: “At maturity, the business and the owner function separately and they do not need each other. This should be the goal of all IFAs.”
He urged advisers to consider carefully how many of their clients are profitable. He said only a quarter of clients in most firms are very profitable, a quarter are not profitable at all and the rest are somewhere between the two.
He said: “A lot of advisers tell me that they feel morally obliged to continue servicing the clients that are not making them any money but where is the morality in using profitable clients’ money to service those who are sucking you dry?”