The recent survey from Nucleus showing that the number of advisers spending more than 40 per cent of their time on admin has tripled in a year should worry us all. Clients do not pay fees for advisers to deal with paperwork, so working two days out of five for free is not good business.
Meanwhile, more advisers are looking to sell their firms amid an increasingly challenging regulatory environment and rising pressure on costs, all at a time when demand for advice is growing.
Indeed, further research from Openwork warns that the demand for advice is not being met, with 56 per cent of adults not currently receiving advice believing they would benefit from doing so.
So there is something of a perfect storm brewing. Advisers are sitting behind a mountain of paperwork, while the clamour for help from the man in the street is ignored due to a lack of time.
Quite clearly, this is not sustainable, so we face two choices: to look at ways to reduce costs and/or look at ways to become more efficient.
This is easier said than done for the 89 per cent of retail investment firms that have less than five advisers, however.
For them, there might not be many levers to pull to influence a cost base or identify areas in which to improve efficiency.
One way to solve this problem is to build a business of scale, but this is simply not a realistic proposition for many.
A single little change on its own will not make a huge difference, but putting a series of small improvements together can generate significant efficiencies.
Just look at ex-British Cycling performance director Dave Brailsford’s “aggregation of marginal gains”.
We should all be familiar with the story of his success.
Under his leadership, the British Cycling team went from being, quite frankly, unimpressive to winning 60 per cent of the gold medals available in the road and track cycling events at the 2008 Olympic Games in Beijing.
Four years later, in London, the team set nine Olympic records and seven world records.
We know from our own conversations with advisers that many of them are not too concerned about making more money.
But I am yet to speak to an adviser who would not welcome a reduction in their levels of paperwork and admin.
Essentially, success will be determined through finding a way to stop doing the stuff you should not be doing.
Perhaps the solution is to use the support of a professional services company, which will take on a large part of the investment risk and deal with paraplanning, compliance, professional indemnity insurance and all the other important stuff, while leaving the client relationship intact.
This lets the adviser run the business the way they want to run it and spend more time with their clients, their family or out on the golf course. Now wouldn’t that be nice?
Tim Sargisson is chief executive at Sandringham