“The one constant in our evolving financial services industry is the demand for quality advice by Australians,” Mr Powell said. “To leverage that demand, progressive licensees and their advisers are embracing two mutually inclusive components: best advice and best practice.”

The industry has increased its focus on best advice at conferences and professional development days, according to Mr Powell, so the challenge now is to have deeper discussions on what ‘best practice’ should be at the adviser, practice and dealer group (AFSL) level.

“We believe there is a great future for single-office AFSLs that have a progressive approach,” he said. “By ‘progressive’ we mean placing clients at the forefront of their business, while developing efficient operating solutions that deliver on the service promise and embrace the post Future of Financial Advice (FoFA) reforms. These advice businesses, that design and deliver their service in line with best advice objectives, we believe will be successful in the new world.”

Mr Powell said that these progressive AFSLs are creating simple client service segments based on services, pricing and portfolio solutions. This enables advice businesses to grow their client base at a lower cost to clients, whilst improving practice EBIT.

“These businesses are actively reviewing their processes and outsourcing services and that will ultimately increase their client facing time from current levels of around 30 per cent to around 70 per cent – this will be good for their clients and good for business,” he said. “Businesses which move with the times will also be more attractive when the time comes to sell.”

However, AFSLs that have a back-to-the-past approach will struggle, according to Mr Powell. “There are some which, instead of moving with the times, choose to keep stagnant business models in order to minimise change. For example, having a singular focus to hold on to grandfathering arrangements will increase the complexity of an advice business and will eventually detract value,” he said. “In order to be profitable now and in the future, single-office AFSLs need to evolve their business model and constantly seek better systems and processes. Thankfully, there are now a variety of service providers offering various competitive solutions for AFSLs and adviser practices which they can leverage.”

Actuate Alliance Services, which leverages SFG infrastructure and IP, provides single-office AFSLs with business process solutions which ultimately translate to comprehensive overall practice efficiencies.

“These solutions enable single-office AFSLs to move to a progressive business model while keeping control and culture intact,” Mr Powell said.