Don’t let FOFA blindside business growth: The Advice Exchange


The Advice Exchange has found in a survey of 200 advisers, that most are relying upon their dealer groups only for compliance and systems administration. 

Most are not utilising marketing or business development services that may be offered by their licencee. 

Managing Director of The Advice Exchange, Andrew Doquile, said advisers must think about the longer term profitability of their business and should take advantage of any help their dealer group can give them to grow their business.
“We think it makes absolute sense that with the looming FOFA deadline, compliance is foremost in advisers’ minds.   Marketing and business development have slipped to the bottom of their priority list. 

“But advisers need to ensure they maintain focus on growing their business, regardless of what changes are happening at the regulatory level.  Particularly if they are planning on selling their practice in the next five to ten years.”

According to the survey, more than 60 percent of advisers rated Corporate Governance as the number one (47%) or number two (17%) service they most value for their dealer fees.  Around 55 percent ranked Administration and Processing Support as the most important (29.7%) or second most important (25.3%) service.

Just nine and eleven percent valued Marketing and Business Development as the most important services respectively. 

The survey also found that only 22 percent of respondents believe their business is ready for sale and just 19 percent have a list of suitors ready to buy.

Mr Doquile said understanding how a business is priced and the sort of buyer it would suit, is important in terms of developing growth strategies, even if the adviser has no immediate plans to sell.

“Any buyer of a business will be looking for long term track record of earnings and client stability.  So ensuring you are targeted with the types of clients you want to attract will make the business attractive to buyers down the track.”

“Building a list of suitors is also one of the most important steps advisers can take if they are planning to exit their business,” he said.   “You need to ensure the potential firm or dealer group understands your business and that your growth plans align if you are to realise the best possible price.

“Selling a regional business to a group really only focused on metropolitan practices, for example, may give you less bargaining power.”

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