Lana Clark

Advice businesses that are enjoying more success, as defined by their Earnings before Interest and Tax (EBIT) margins and owner satisfaction, exhibit six critical characteristics, according to a new report by VBP-backed Elixir Consulting.

The inaugural 2024 Advice Operations Research Report, sponsored by Colonial First State, found top-performing businesses have six things in common: a healthy culture, dedicated Practice Manager, documented processes, they outsource tasks, use managed discretionary accounts, and engage an external business coach.

The report, which is based on a survey of 171 advice businesses, also found a direct correlation between pay and performance, with businesses that reward all employees by paying bonuses and competitive salaries recording an average EBIT margin of 27%.

(By comparison, the average advice business has an EBIT margin of 23% after normalising Principal salaries to $150k + super.)

They also recorded higher employee satisfaction and culture scores.

According to the report’s author Lana Clark, Founder of GSD Lab and Senior Consultant at Elixir Consulting, the research highlights the positive impact optimising operations can have on profitability, employee satisfaction and culture.

“It is incredibly valuable having hard data on what’s happening inside advice businesses to give those struggling to create, implement and manage essential operational aspects a compass for achieving back-office excellence,” she said.

“So many discussions about business growth and profitability are focused on recruitment, scale and M&A, but another important lever is optimising operations. Advisers can enhance client service, build a strong culture and mitigate risk by driving operational improvements.”

Elixir Consulting surveyed 171 advice businesses across Australia, representing 561 financial advisers, 43 risk specialists, 72 accountants and 25 mortgage brokers, as part of its research.

Over 50% of participants belonged to a medium-to-large licensee, 11% belonged to a boutique licensee and 37% were self-licensed. A quarter were based in a capital city, 40% were based in metropolitan areas and 33% were in regional areas. www.virtualbusinesspartners.com.au Commercial in Confidence +61 (0)2 8999 9696 2

Bryce Quirk, Group Executive Distribution at Colonial First State, said the comprehensive analysis provided a clear picture of the current state of advice operations and the future direction for practices pursuing excellence.

“We believe that helping advice practices be more successful can only help more Australians access and enjoy the benefits of professional advice,” he said.

“Over 60% of survey participants said they had a lot of new client opportunities but only half felt they could comfortably service them. The other half were struggling to keep up with demand.”

“We want to support advisers to efficiently deliver high quality advice and increase their capacity to see clients and grow their business.”

Based on the report, the average advice business added 36 new clients in 2023. The median firm added just 21.

Sue Viskovic, Founder of Elixir and Head of Consulting at VBP, said the report reinforced the importance of the right technology for streamlining back-office operations, citing that 68% of respondents did not have effective systems for managing workflow. Furthermore, one third described their systems and processes as “out of date, not documented and not consistently followed”.

“As experienced business coaches, we know that fully tested and thoroughly documented processes are a critical step, if not an absolute must, to successfully streamlining and automating business operations,” she said.

“The trend towards greater technology adoption is accelerating, which is encouraging to see, but this also increases the importance of cyber security, particularly as systems become more connected and integrated.”

For a copy of the report, visit https://vbp.ac-page.com/advice-operations-research-report-2024

For more information, please contact:

Leng Ohlsson

Splash Content

M: 0409 509 516

E: leng@splashcontent.com.au

W: splashcontent.com.au

The post New research on what’s really happening in the back-offices of advice businesses appeared first on AdviserVoice.

Sue Viskovic

Like anyone that has nurtured and worked tirelessly to produce an in-depth research report, yesterday’s announcement of the launch of the Adviser Pricing Models 4^th Edition Research Report puts to bed one of the most extensive research reports conducted by Elixir Consulting to date and provides a sense of relief to principal Sue Viskovic.

“This has been a mammoth task consolidating and analysing the data to produce the Adviser Pricing Models Research Report fourth edition. It includes in-depth data from 320 advice practices on how they charge for their services.” stated Mrs. Viskovic, “Pricing financial advice has always been complex, and when you add in a deep-dive to pricing insurance advice, with all of the variables we found used by advisers, it’s been no small feat to interpret the data into a piece of work that will be incredibly helpful for every adviser wanting to determine or refine their own pricing model.”

The research provides insights and the models being used and figures being charged, for pricing:

• insurance advice
• engagement fees for new clients with comprehensive and limited scope advice,
• engagement fees for aged care, estate planning, finance advice
• ongoing fees – for comprehensive and limited scope advice
• specific application of fee models in 6 client case studies, and
• complete snapshots of 6 different Business Models

“If you’d told me a decade ago that we’d now be In an environment where every adviser has to charge a fee for their financial advice, and yet there is more confusion and curiosity about pricing models than ever, I’d have probably laughed” shared Mrs Viskovic. “Whilst pricing is often talked about, the intricate detail of how advisers charge for their services is still elusive to most; today it remains a very private and commercially sensitive topic.”

“I want to say thank you to all those advisers that took time out to complete the research survey,” says Sue, “you were incredibly generous in sharing your pricing detail, your challenges, and the solutions you’ve found to overcome them. By doing so you have provided great insight into the depth and breadth of the pricing models used in the Australian Market.”

The Pricing Model Research Report 4^th Edition is now available for online purchase.

To highlight some of the take-outs from the research Sue Viskovic and co-author Lana Clark will be publishing a short series of videos of their discoveries during the countless hours preparing the data and compiling the research report.

“When we decided to expand on the questions we posed to advisers in this latest edition, we never dreamed that the responses would be so complex and detailed” states Ms. Clark, “Respondents have been so generous with the information, making this report this biggest and most in-depth to date.”

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