Advisers thrive because they anticipate, worry, prepare and manage complex client issues.
Good advisers are masters at it.
Great advisers are masters at doing the same for themselves.
There are several hurdles facing advisory firms in 2023 – for advisory teams considering their 2023 plans, here’s my list:
#4 – BEING BUSY
By a country mile, my most-read blog this year was about being busy.
Perception is the biggest problem with being too busy – it isn’t respected or treated enough as a real threat to the success and growth of advisory teams.
Joe highlighted a typical scenario where advisers can deliver an excellent advice experience, be respected by clients, alliances and networks, have an abundant source of leads and enjoy the client contact but experience a crushing weight of failure and frustration to achieve deserved returns for value delivered.
Being too busy is a significant hurdle because it prioritises the urgent more than the important.
Advisers like Joe can spend a lifetime prioritising their client’s plans over their plans and be left wondering where their options are and what has happened to their success. They realise too late how badly they have over-prioritised the care of their client’s plans believing their own will be magically taken care of.
Left untreated, the prioritisation of clients’ plans over their advisory team plans will worsen in 2023. Treatment is less about new systems, licenses, team members, platforms, propositions and pricing models and more about treating the personal habits that no longer serve the team.
Particularly any addiction to ‘being busy’.
The advisory industry’s love affair with revenue and activity benchmarks must be replaced with profitability and productivity benchmarks.
#3 – PROFITS
“Bigger isn’t better” was another popular blog theme this year.
Growth can be both an imposter and a seducer.
The recent 2022 Quality of Advice Review is a good example.
This disappointing Review not only missed its own self-imposed 16th December deadline but will increase product sales from institutions promising ‘good advice’. Considering that the eight previous enquiries over the last twelve years have also failed to grasp the difference between advice and product distribution, these recommendations are to be expected. Still, they can’t be forgiven for the long-term consequences for most advice-seeking Australians will face as they realise in future years that the success of their financial lives depends on the products they buy rather than the advice they take.
Even considering welcomed reductions in regulatory paperwork, the Review’s re-ordaining of institutional ‘good advice’ will make profit-creation harder for advisory teams who may be encouraged by reduced loads of paperwork. The institutional tech offerings from groups leveraging AI, such as ChatGPT, will force profitable and sustainable growth from product sales well away from relationship-based advisory teams.
Profits fund growth.
Productivity creates profits.
Capacity management controls productivity.
#2 – CAPACITY
The biggest and hardest resource to manage in 2023 will be talent.
There is not a lack of demand for financial advice.
There is a chronic lack of supply.
Consequently, advisory firms will face three distinct talent challenges in 2023.
Firstly, advisory firms have to offer recruits something better than remuneration. They will not be able to compete with the remuneration packages offered by the institutions, which will re-emerge with ‘exciting’ new initiatives as a consequence of new ‘good advice’ regulations.
Secondly, advisory firms will be forced to improve the productivity of their teams as both clients and teams expect more returns for less effort.
Thirdly, advisory firms will have to manage the shift of clients, systems and cultural dependencies away from existing team members to new team members.
These are tough hurdles, but not as tough as the changes needed in our paradigms.
#1 – WORTH
The most challenging hurdle for advisory teams to manage in 2023 is self-worth.
The downside of being a great adviser is often being a poor pricer of the worth provider.
Compounded by decades of worth being attached to ‘what’ is done rather than ‘ what is achieved’, an adviser’s most significant hurdle is trusting their clients enough to objectively, consistently, ethically and methodically identify the price of the value in an advisory relationship.
Financial advice is not a mortgage, an investment, a superannuation fund, an insurance product, a tax structure, an estate plan or a cash-flow plan.
It is a relationship of worth judged by each client.
No advisory team is ready for the pricing hurdles and breakthroughs needed in 2023
Being ready is overrated and never happens when facing opportunities for change.
My opening blog of 2022 was about leadership.
As the industry faces a coming decade of re-skilling starting from the top, the themes of flexibility, belonging and commitment are as essential as ever.
The advice industry has never had more opportunities.
My advice is ‘braver, not harder’ in 2023.
Thank you for being a part of my 2022.
Photo credit: Pexels – Engine Akyurt_13088177
ABOUT JIM STACKPOOL
For over 30 years, Jim has influenced, coached, and consulted advisory firms across Australia. His consulting firm, Certainty Advice Group, coaches, trains and builds advisory firms delivering comprehensive, unconflicted advice with fees priced purely on value. He is growing a solid and collaborative community of advisory firms aligned on Australia’s only Certification Mark advice standard for comprehensive, unconflicted advice – Certainty Advice. He has authored four books regarding financial advice with his latest – What Price Value – available now since its release in March 2022.