“Advisers are not in the business of delivering advice, they are in the business of building a business that delivers advice”
Mark P. Hurley, CEO Undiscovered Managers – Manly Pacific Hotel, 1999
I first heard the above quote listening to an American fund manager, Mark P. Hurley, talk at an Adviser Conference at the conference venue I’m holding my next conference next month.
The quote was one of the ingredients of Hurley’s ‘secret sauce’ which was featured in his 1999 research paper – “The Future of Financial Advisory Business and the Delivery of Advice to the Semi-Affluent Investor”.
The research paper was somewhat unwelcomed in the boom times of 1999.
It predicted significant change to the relatively benign existence for advisers during most of the 1990s. The research concluded that the excess supply of clients had enabled ‘significance funds capture’ for most advisers who, at the time had enjoyed a fairly easy entry into their positions.
The research strongly suggested this was about to all change as the industry was overdue for significant rationalisation.
THE PLAN OR THE PERSON
A few years before Hurley’s report Kim Payne‘s Dad – Malcolm Payne – was telling his audiences “…the money is in the planning”.
When I first heard this in 1989, I thought he was referring to financial planning. When I met him a couple of year later, I realised he was referring to Hurley’s above – it was about an adviser’s business planning.
Payne was ahead of his time.
Malcolm’s (and I’m guessing Kim’s) planning style was strong where most others were weak – on accountability.
To understand the power of accountability, you had to witness or be subjected to one of Malcolm’s planning sessions.
He was a master of helping successful advisory firms become more successful.
His approach was less about “do this because it worked for my success” and more about “…what is the success you aspire to achieve and what are you doing about it?“.
The power of Malcolm’s approach was not the strategy, it wasn’t the clarity from his sessions, nor the updated business plan.
It was the follow-up session three months later when he would review progress to plan.
EXCUSES
You see, during plan review sessions, Malcolm wouldn’t accept any responses such as “I’ve been extraordinarily busy with client work”, “I’ve lost a key team member”, “I’ve moved offices”, “I’ve been building a new house”, or “I could not convince my team or partners”.
He would respond, saying these are all excuses.
His philosophy was that these ‘surprises’ are just a ‘given’ and should be ‘expected’ when running a business.
Malcolm would simply ask the strugglers “Who controls your plan? You or something else?”
Anyone that answered “something else” was not invited back to future planning sessions.
When our excuses become the priority, our plans become a casualty.
Today the industry is at yet another time of fundamental change and opportunity. Many advisory teams find that their busy day-to-day issues are driving their development rather than their own hoped-for plan.
As a consequence, the destiny many aspire for, gradually slips away out of control down the drain lost amidst a growing to-do list and frustrating business wobbles.
The real work is making the difficult decisions needed to stick to a plan, not talking about excuses of being so busy or unlucky due to yet another unexpected situation.
CONSEQUENCES
The biggest consequence of planning without control of priorities is obviously growth.
The biggest element of growth most affected by lack of focus on planning is less obvious.
The effect on how teams develop.
Without a solid plan, job roles develop less focused on what is aspirational for each team member and more focused on what is attainable for each team member. The growing demands of every role turn the aspirations of team members more dependent upon luck rather than planned strategy.
Once firms have survived their first 18 months, their growth is not about creating or handling more activity, it is about creating greater productivity by aligning individual career and firm directions.
GREATER PRODUCTIVITY
Improving productivity for advisory teams comes down to two factors.
The first and well-understood is systematisation – building the client, team, financial, workflow, and compliance systems that support day-to-day operations.
The second and less understood is prioritisation – the identification and day-to-day application of the firm’s priority.
Without the accountability that comes with planning, everything too easily becomes a priority making growth more a product of luck than choice.
Accountability enforces the needed difficult decisions, which are often beyond the comfort zones of current operations, but essential for the growth of most senior and junior team members.
Avoiding the difficult decisions that growth thrusts upon every firm and the priority become simply to survive.
This is what Hurley and Payne were talking about many years ago and it is as essential today as it was then.
The money is in the planning.
That’s the real work.
What do you reckon?
Jim
PS – consider coming along to my Certainty Innovation Day – March 17th in Manly – you’ll join other advisory teams sharing tools, challenges, business models and results being achieved building the new advice brands of the future.
Photo credit: iStock
ABOUT JIM STACKPOOL
For over 30 years, Jim has influenced, coached, and consulted advisory firms across Australia. His firm, Certainty Advice Group coaches, trains and is building a growing group of advisory firms delivering comprehensive, unconflicted advice, priced purely on value. The community of advisory firms aligns with Australia’s highest and only ACCC/IP Australia Certification Mark standard of comprehensive, unconflicted advice – Certainty Advice. He has authored four books regarding financial advice with his latest – What Price Value – available now in pre-release for launch in March 2022.