What do you believe will be the main characteristics of leading advisory firms of the future? Eight planners provide their thoughts.

Damon Bensein CFP®

Head of Private Wealth, Elston

Licensee: EP Financial Services

As the advice industry evolves, so too will the value proposition and the way we service clients. We believe that over time advisers will need to move their value proposition away from picking stocks, trying to predict markets and spending time on SOAs. This will be largely driven through advances in technology by automating process, driving down margins and helping to reduce inefficiencies that currently exist.

While technology does place a threat to our profession, it can also assist in being proactive, building scale, reducing total cost and improving interaction.

To be successful, it will be important to play to our strengths and the key strength advisers have over the advice driven by computers, is our ability to have empathy and build relationships.

To do this, we believe there will need to be a greater focus on gaining a thorough understanding of our clients, setting goals and establishing deep relationships with these clients, and delivering solutions that consider tax efficiencies and estate planning requirements.

Advice firms of the future will need to be great at providing pro-active communications and high quality advice, plus the use of technology will be critical in providing a superior client experience.

Customisation of both advice and investment solutions will also be even more critical to success. However, with customisation comes increased complexity and costs and it will be important to develop or utilise systems that provide this in a scalable solution that is competitive on price.

Ultimately, the successful advice firms of the future will be those that are open to change and technology. They will need to build superior relationships with their clients and drive outcomes that are customised to their individual needs.

Anne Graham CFP® LRS®

CEO/Financial Planner, Story Wealth Management

Licensee: Securitor

Gone are the days of financial planning being a ‘cottage industry’. The business of the future will be a corporatised model. Systems and processes, checklists and procedures – actually, running a practice like a business, rather than a hobby, will be necessary for growth and evolution.

Face-to-face and deep client relationships will be the model of choice for some firms, whilst others might have a broader client base that is low-touch and high-tech. Regardless of the model, technology will be at the core to enhance the client experience and bring efficiencies to the business.

Our teams will be professional and many of the tasks they currently do will become automated or even outsourced, giving them the time and opportunity to add real value to the client and the business. The work environment will also be more flexible to attract and retain the best people.

Advisers and their teams will be highly educated and specialised. For example, we might have specialist retirement advisers who not only advise on strategy but also the psychology of retirement and behavioural finance.

The leading firms will be clear on their client offer – what do they do well and who do they serve. Focus and clarity regarding strategy and the choices made will be the norm, as will focus on implementation of the strategy.

Professionalism will dominate the landscape, and the conversation and voice of advice will be led by advisers, rather than institutions and product providers who, whilst are important players, are not the profession.

Adele Martin CFP^®

Managing Director and Senior Wealth Adviser, Firefly Wealth

Licensee: RI Advice Group

I think as advice costs continue to rise, advice will go two ways: high end, DIY or scaled in a one-to-many model.

It’s sort of like how fitness is – you can just have the gym membership where you are on your own, group classes which help to keep the cost down, or if you need extra help, there is personal training.

I think investment advice will become completely computerised and won’t be a way advisers add value.

If we are talking well into the future, I think tax and financial planning will merge. Essentially, one office and one person for both. Clients are time poor and are having more pressure placed on their time, so they just what one place to help get them organised.

This is already happening. Administrative jobs will be automated through technology or placed offshore as a way to stop the rising costs of advice.

You can already get a chartered accountant based in the Phillipines for $12 per hour or an SOA done in Pakistan for under $200. Whether you agree with this or not, it’s happening and I think it’s going to be a way to keep advice costs down.

I also think virtual financial planning will become the norm and advisers won’t have to be tied to just helping clients in a particular location.

Who knows, maybe in the not too distant future, we will be holding our meetings via virtual reality or I’ll be hologrammed into their living room.

Gil Gordon CFP^® AEPS^®

Proprietor and Senior Adviser, RI Lower Hunter

Licensee: RI Advice Group

As the growth in fintech continues and the traditional value propositions of financial advisers are commoditised and taken to the mass consumer via ‘robo advice’ tools, new business models will evolve around objective-based advice.

This is not simply goal setting, but rather a mandate to the adviser to ‘keep a lot of balls in the air’ while still managing their client’s money.

For the traditional retiree, paying fees to manage a diversified portfolio within the bands prescribed by the client risk profile, is about as exciting as watching paint dry.

What they will remember and be grateful for is the advice that allowed them to take holidays, renovate their house, help their children and retire earlier, while still providing for aged care and not running out of money before they die.

The advice firm of the future will use engagement tools that frame this conversation and illustrate how the adviser’s toolkit will assist new and existing clients achieve their objectives.

They will track and report on objectives set and achieved, as well as those still unfulfilled.

This will obviously include portfolio management but also cashflow tracking, estate planning and aged care, just to name a few.

Patrick Canion CFP^®

Chief executive officer, ipac Western Australia

Licensee: Charter Financial Planning

The leading advisory firms of the future will do something exceptionally revolutionary – they will spend all their time with their clients.

Most financial planners right now run two businesses in one – an advice business and a compliance/paperwork processing business. Advisers try and see more clients, but that only results in an exponential increase in back­-office paperwork.

I believe the business of the future will be one where all staff – whether advisers or para-advisers – spend 95 per cent of their time in front of clients. This is what the market wants, and indeed, is really the only thing they are willing to pay for. This is what advisers want, too.

The regulators, however, want you to do something entirely different. Until we are recognised as a proper profession – something that in my view will take at least a decade to manifest – they want you to not only fulfil the spirit but more importantly, the letter of the law.

They want those Financial Services and Credit Guides and Fee Disclosure Statements and Records of Advice churned out. They want you to consider and document every possible scenario that is reasonable.

Most of us didn’t get into this profession to fill in forms – we joined up to make a positive change in our client’s lives. But you can’t ignore the law, nor have a business built on quicksand.

How do you reconcile these competing demands? Simple, by finding quality specialist suppliers to outsource all back-office processing, so you can focus on your clients.

Rebecca Fergusson CFP^®

Principal and Private Client Adviser, Main Street Financial Solutions

Licensee: Fitzpatricks Private Wealth

Going forward, the main characteristics of the leading advisory firms are likely to be:

1. Firms that are prepared to adapt and accept change. The financial services landscape is constantly evolving and advice businesses need to adjust to this changing environment to remain the key influencer in their clients’ lives. Some examples of this include using Google alerts, ensuring your website is mobile friendly, and focusing on the online footprint of the business to ensure this delivers a consistent message.
2. Firms that outsource non-core functions of the business to enable the advisers and staff to focus on income generating activities and building the business. For example, outsourcing paraplanning or bringing in expertise when needed on an ad hoc basis for specific roles, such as business coaching. This will enable businesses to dial up or down these services according to demand, thereby reducing their ongoing fixed costs.
3. Firms that have established systems and processes to ensure that the business delivers a consistent, efficient and compliant outcome to clients.
4. Firms that focus on continual improvement and professional development. This may involve attending conferences, peer-to-peer brainstorming sessions or listening to podcasts.
5. Firms that are flexible in how they manage and remunerate their staff, to allow work to be integrated seamlessly into their lives. For example, an employee may prefer to start at 6am and work until 2pm, instead of working the hours of a traditional day.
6. Firms keeping close to their clients and being aware of public sentiment. This will ensure they can adjust their service offering to remain relevant – the trend is your friend.

In my view, the leading advice businesses of the future will offer personal, professional, unaligned, fee-for-service financial advice that is tailored to the needs of each client.

Adopting a one-size-fits-all approach will not be appropriate for those wishing to be seen as leaders in the profession.

Wayne Leggett CFP^®

Principal, Paramount Financial Solutions
Licensee: Fortnum Financial Advisers

There are four key features that leading advisory firms of today contain that are likely to be essential requirements for any advice firm if they wish to survive in the market of the future.

1. Multi-disciplined
   Either through internal resources, or well-defined relationships with other professionals, these firms will have the capacity to initiate dialogue and assist clients in facilitation of anyof their requirements relating to their financial affairs.
2. No recommendation bias
   For a client to be confident that you are putting their interests ahead of your interests, your charging structure will need to be a pure ‘fee-for-advice’ model, wherein the client pays you for your advice, irrespective of whether or not they choose to act on it. There cannot be a nexus between practice revenue and financial transactions, especially if the quantum of the transaction is a factor in the revenue generated.
3. Have a clearly defined ‘ideal client’
   Be this by virtue of profession, life stage or relationship style, successful firms know exactly what type of clients they are looking for and will focus on those. This does not mean there will only be a single category of target client, but despite how many you settle on, they will need to be clearly defined and the focus of both your marketing programs and your service offer.
4. Provide financial ‘counsel’
   With the proliferation of so-called ‘robo-advice’, clients effectively have access to all the information we do. Thus, our role will be less about providing them with information and more about facilitating their decision-making.

Daryl La’Brooy CFP^®

Financial Adviser, Hillross Financial Services

Licensee: Hillross Financial Services

Knowing your clients extremely well is going to be paramount. If a firm knows its client well, then it can advise them well and meet their needs.

Service delivery also has to be very good. Client expectations have to be met. This is where great staff come in and team members who are fantastic at serving clients well.

Going above and beyond what the average firms do is also important. It means if advice and services can’t be provided in-house, then having trusted third parties that can be brought in to assist clients’ wider needs, are critical if you want to stand out from the crowd.

A learning culture in the firm is also another important characteristic to have. A learning culture is one where the team always looks to improve skills and knowledge with a view to ensuring clients are better advised and served.

Using technology to improve efficiency and using IT to provide better client outcomes is also vital.

Some firms may also choose to become specialists in a certain area and by doing so, they gain an edge over practices that work as generalists.

Engaging with clients better through the use of soft skills is another key to success. Capturing what is of value to the client and then delivering that value at the outset, will help a firm prosper overtime.

Finally, proper pricing for the work being undertaken is fundamental to success.

Getting paid adequately for great advice and service is going to ensure the practice can continue to hire, keep and train good people on an ongoing basis.