The business of financial advice is changing. Robo-advice is creating a low-cost way to deliver traditional wealth management services. Commissions and the revenue models of old are under pressure. And compliance obligations seem like they’re increasing each year.
When change happens, people tend to do one of two things. They either embrace it and look creatively at the opportunities, or they sit back and watch it happen … incorporating each new element of change as it’s legislated or when it feels like there’s no other option.
Which would you do? Do you feel pushed into adapting, or are you drawn to the possibilities?
Both are natural responses. And neither is necessarily right or wrong. But one will have you travelling at least a little ahead of the curve, positioned on the front foot, like a tiger ready to pounce.
And the other, more defensive approach, can often result in a fight not just to thrive, but to survive.
Of course, the impact of all this change is that margins are being squeezed. Mature, profitable businesses are finding their profits slowly seeping away, as they must hire more people to deliver the service their clients and the legislation, expects.
In some cases, owners start to consider an exit.
But without that profitability, a sale may not result in a value exchange that matches what they think their business is worth.
“Advisers are discovering that profitability is more important to buyers, than revenue.”
I’ve seen these challenges in multiple businesses. And a common sticking point is often the administrative inefficiencies that have evolved as more has needed to be done, and without the time to investigate the optimal way of doing it.
Time gets wasted. Money gets spent as the clock ticks. And staff get fed up with waiting on hold to Centrelink for the third time this week.
In our own financial advice business, we experienced a degree of something quite similar. But over time, we developed strategies and processes that streamlined tasks, saved time, and left our financial advisers with time to focus on the things they love to do – advising.
We built a global team.
It wasn’t a silver bullet. There were broader changes that were made.
But that one piece of the puzzle changed the way we did business, impacted the bottom line, and has since allowed me to help other financial advice businesses do the same.
By building a team of educated, articulate, enthusiastic people overseas, we:
- Reduced the cost of doing business
- Transferred time consuming administrative tasks to people that genuinely enjoyed doing them
- Focused on proactive activities, like growing our advice partnerships, and nurturing new and existing client relationships.
It was win-win.
Our new global team could put their university education to good use, and in many cases, provide a sustainable income not just for themselves and immediate dependents, but for their extended families.
Our Australian team became more engaged, as they were given the chance to perform the higher-level activities that challenged and rewarded them.
Our clients received a smoother, faster, more stream-lined experience.
Our businesses’ profitability and value increased.
At a surface level, the solution seems simple. It is, after all, essentially just delegating a group of tasks to someone with a set of skills that are “just right” – the Goldilocks strategy.
But instead of delegating to temporary, individual freelancers, we took a team building approach. We extended our business and built a permanent team based in the Philippines.
And that concept has evolved into 5 ELK. Where we help you, build your own global team, and take care of the hiring, payroll, and training, so you spend less time figuring it out and more time reaping the benefits sooner in your business.