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Phil Bray: Five business lessons to help the next generation of advisers

Starting out on your own is challenging but these tips should help smooth the way

Bray-PhilThe first person I spoke to as I sipped my early-morning cup of tea at this year’s Money Marketing Interactive event was a young financial planner starting his own firm.

I love these conversations. He was full of great ideas and his enthusiasm for financial planning was infectious. If he is reflective of the younger planners coming through, then the profession is in safe hands.

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However, it got me thinking about the challenges that lie ahead of him. While hugely rewarding, building a new business is incredibly hard work. There is no doubt that threats lurk, too.

So, I thought I would look back on some of the lessons I have learnt – sometimes the hard way – in business, which will hopefully help the next generation.

Malcolm Kerr: The keys to high standards

I imagine a few of you reading will find these familiar:

  1. Know your “why” and your “go-to” people: Building a new business can be a lonely experience. There will be occasions when you wonder why you ever thought it was a good idea. It is at these times that you need to remind yourself why you started. Understanding your “why” is hugely important; revisiting it in times of stress and anxiety will remind you that the pain you are currently feeling is temporary and will all be worth it. It is also important to have people you can turn to when the going gets tough. These supporters and advocates should be at the end of the phone to offer advice, wise counsel or just listen as you let off steam when things do not go as you hoped. I know who mine are and I am hugely grateful to them.
  2. Focus on your business: At its best, the financial planning profession is open, caring and transparent. That provides huge opportunities for younger planners to learn. Provided it does not stifle your own creativity and innovation, why would you not want to learn from others? But the focus must be your business, not what others are doing. That extends to avoiding being openly critical of your competitors. It is a small world and, frankly, it is not a good look.
  3. Learn from your mistakes but do not live in the past: We have all made our fair share of mistakes in the past; I am certainly no exception. The key is to channel those experiences and turn them into constructive lessons that help reduce risk in the future, without living life constantly through the rear-view mirror. I have heard it said that venture capitalists in the US are more likely to back entrepreneurs who have previously failed because they have learnt from their mistakes. I am not sure if it is true, but it has a certain logic to it.
  4. Build your team and delegate: I firmly believe there is a strong correlation between the quality of your support team and your ability to grow a sustainable business. The natural temptation in the early days is to keep cost to a minimum by doing everything yourself. That is understandable but it will soon restrict your growth. Finding good people to support you, training them, then delegating everything you can will free you up to build your business. The key is to find flexible support that you can trust to deliver; do that, and you will see it as an investment, not a cost.
  5. Know your numbers: The greatest opportunity in starting a new business is that you can get things right from the off. Nowhere is that more important than when it comes to your finances, particularly your pricing. Post-RDR, many advisers have simply fallen into their current charging structure without paying enough attention to fundamentals such as profit margin. You are at the start of your journey and what you charge now will be difficult to change in the future. Better to get it right from the off. That means understanding the cost of delivering your services and then building a profitable but fair pricing model.

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These are just some of the lessons we have learnt in the 18 months since we started our business, which we believe are transferable to planners. They are by no means exhaustive; however, many commons themes emerge:

  • Know when to delegate
  • Have confidence in yourself and the value you add
  • Keep your chin up
  • Be a good egg.

Apply these in your business – and life in general – and you cannot go far wrong. And if you do? It does not matter, so long as you learn from it.

Phil Bray is director of The Yardstick Agency


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