Tim Noonan Managing director advisory alliances
As advisers, we aim to stop people being their own worst enemies and get financial security. Now advisers have to take their own advice. The RDR is likely to bring the number of advisers down but those left will be able to grow incredibly quickly. From our observations in the US, here are some of the things that may hold back your business.
Relying too heavily on experience and intuition
What has brought you to this point will not necessarily be what takes you forward. A lot of people invoke experience to hold off the future. If the rate of change on the outside exceeds the rate of change on the inside, you are going down. Are you providing information at a rate that they are getting it from other sources? You have to do rigorous situation analysis. How do I compare? What is my profit per client? How do I acquire the best clients? What are my customer’s others alternatives? Benchmarking is very important.
If clients want lots of things that they are not getting, they will go elsewhere
Not looking at what you get your fees for
What do your clients want and get? What do your clients want and don’t get? What do your clients don’t want and get? Self-evidently, if your clients want lots of things that they are not getting, they will go elsewhere. For example, during the downturn, most people simply wanted to know what the financial crisis meant for their retirement plans. Could all advisers really say that they were providing this?
Thinking that the way to grow your business is to focus on assets under management?
This leads to the acquisition of non-profitable clients and service capacity issues. It also prevents you from creating differentiation. You can either treat your business as a revenue stream for you or to create shareholder value. Either way, you need to disengage from non-profitable clients. Draw a grid that plots effort against revenue and you will see who is not “showing you the money”.
Casting a broad net to catch more clients
You have to show the market that you stand for something and you need a strategic focus. There are certain clients that you will be good at servicing and certain clients you won’t – you can measure this by the levels of anxiety you feel in relation to different clients. You don’t need to work with everyone, everywhere.
“Offering the market”
Don’t bet your business on the market. Last year, the market made monkeys of everyone. People want wealth management. You need to be the orchestrator. It’s all about “doing great things for clients and make sure they know about it.”