Changing face of the Finacial Planning Industry Australia
Winds of Change are blowing through the Financial Planning industry today. Increased competition from previously unheard of players, issues with performance and legislative pressures are all combining to reshape what used to be a relatively easy industry within which to make a quid. ... Like the room heater salesperson needs to understand that they are in the personal comfort industry, and not in the whitegoods industry, so must the financial planner understand that they are perhaps in the business of helping people achieve whatever their objectives are (be they financial or lifestyle) and not selling financial plans or investment advice. ... Since the Late 90’s it has been possible to implement a financial plan online or through direct transaction for far less cost than most advisers will, or can provide in a face to face situation with the client. ... Such as happened recently with the changing hands of BT. ... What industry are we in? The answer that differentiates away from the traditional model and is the backbone of many successful planning businesses is that the clients wants to have choice and security in their Lifestyle, leading up to and in retirement. ... Clients do not want financial planning – They want what it will do for them… Outcomes… and usually that means delivering and managing a Lifestyle! There are a number of highly successful financial planning practices/dealer groups, who realise this and have exploited it to great profit . ... To remain competitive and to build a business that has value, today’s financial planning business must focus on adding value to their clients by helping the client define their lifestyle and financial objectives. The planning business can then manage the client’s financial affairs to give them the best chance of achieving those objectives. This becomes the businesses value proposition; this is what the great financial planning businesses are selling! ... Firstly by defining and concentrating on the client’s lifestyle goals and expectations and then applying more traditional planning methodology to achieve them, whilst communicating clearly what is being done and what needs to be done. ... Building value by corporatisation Financial planning practitioners need to concentrate on the fact that they are a business that needs to build tangible assets (that is, their clients and the income provided by them) and has renewable income based on what the business can provide. ... This is true of many financial planners today, who were working with or for somebody else, discovered they were good financial planning technicians and thought! ... In point form the practice needs to develop: · A focus on understanding the client’s needs and expectations based on what financial planning can do for them - outcomes. ... Few financial planning firms have clearly defined processes or adequate systems to manage critical client information or events. ... Summary This paper attempts to give the reader an insight to what the financial planning practitioners of today can to do to survive and prosper. It is not exhaustive, and the proposed model is not necessarily the solution for every business, but it provides a framework based upon industry best practice to provoke some thoughts that may lead to action.