The aim of the SLICE survey, which runs 3 times a year (each time on a different theme) is to provide financial planning practices with an opportunity to share their views and insights with their peers and build an understanding of the most effective approaches to a broad range of hot button topics that challenge practices’ efficiency, profitability and viability. The latest SLICE survey focuses on financial planners marketing strategies.

Survey authors, Peter Dawson of The Dawson Partnership and Susan Rochester of Balance at Work, say the latest survey provides data to confirm what they have observed among financial planning practices.

The vast majority of financial planners surveyed have a marketing plan (83%) with 73% of those with a plan saying they put the plan together either on their own or with their business partner(s) and 47% drawing on the resources of a practice development manager. 33% had input from a business coach.

‘Up until a few years ago our marketing plan was pretty rudimentary but as time has gone by we have adopted a more structured approach with regular marketing planning and review meetings that we hold each quarter. This has helped us keep a focus on our marketing campaign making sure it remains relevant to our business and helps us achieve our goals.’
Principal SME financial planning practice

Of those businesses with a marketing plan 53% said that having a plan in place has opened up new opportunities with 40% saying that they were unsure if having a marketing plan was responsible for new opportunities that arose for their businesses.

While most respondents don’t use an external source to assist them put together their marketing plan 50% said that they would be open to doing so as they felt that someone with the knowledge and experience could add value to their marketing planning.

‘I suppose it’s too easy to get bogged down in the day to day work in a one man practice and my approach to marketing is a bit hit and miss but I do recognize the value of having a marketing plan and would be willing to hire a marketing consultant.’
Sole practitioner

The main marketing strategy used by the most respondents was utilising formal business partnerships (33%) followed by direct referrals from existing clients (28%), while 11% use networking as their primary strategy.

‘We have traditionally gained most of our business from our clients but it got to the stage where we realised that to grow to where we wanted to be we would need to look at other means of growing the business. We had some relationships with local accounting firms and worked towards developing these. This strategy has led to an increase in revenue of 22% each year over the last three years.’
CEO SME Financial Planning group.

‘Although the majority of respondents say they track the effectiveness of their marketing via a range of means, there was a surprisingly wide variation in the sophistication of their processes. While some follow a process where all leads are tracked, monitored and the source identified, then report on results regularly to see what is working and what is a waste of time, others have very little in place.’
Susan Rochester

According to our respondents social media is not a major strategy in their current marketing plans and a number of respondents made comments including ‘Social media is just a lot of noise,’ ‘Social media maybe ok for an on line business but our firm is a people to people business and nothing can replace that’ and ‘My kids use Facebook and I just don’t get it’.

‘We expected to find one or two respondents reporting social media as their main marketing strategy. This was not the case in this sample, although comments indicated that practices are using social media to support other strategies, for example by sharing newsletter articles via social platforms.’
Peter Dawson

However social media wasn’t without some support with one respondent stating that she was open to using social media as ‘it’s all about connectivity and if I can interact with people at a professional level on social media that can only be good for my business’.

The practices that responded to this survey were mostly more than 10 years old (78%), with 17% who had been in business 6-10 years and only 6% for 5 years or less. The majority had fewer than 10 staff (72%) although 28% of respondents were from firms with 21 or more staff.

Concluding remarks

The Slice 3 survey has revealed a strong focus on financial planners developing structured marketing plans and that these are far from static documents as most reviewed their marketing plans on a regular basis. Respondents were focused on building their business by drawing on their relationships with their clients and through formal business relationships. Many are yet to embrace social media as a major part of their marketing plan, although this may change in time as attitudes shift.

For more information about the SLICE survey, contact Peter Dawson directly on 0418 601 245 or email peter@dawsonpartnership.com.au

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Peter Dawson

The threat of people fraudulently representing themselves using creative licence is real and is evidenced in up to one in five resumes including false and misleading information that is designed to get potential employees leap frogging their competition.

This fraudulent activity ranges from lies of omission where dates of unemployment are ‘smoothed out’ of a resume through to including blatant misinformation regarding responsibilities, achievements and academic qualifications.

Where the fraudster has mastered the art of pressing all the hot point buttons at interview drawing on a plethora of fictional stories supporting his claims to be a high performance candidate, you have a potentially lethal cocktail that can lull the employer in to a false sense of security. This vulnerability can lead to a serious lapse in judgement and proper screening processes become compromised. At worst there is cursory attention paid to undertaking due diligence on the candidate and an offer is made when it shouldn’t be.

The high profile case of Andrew Flanagan is telling in that he built a career with an impressive but fraudulent resume securing the role of general manager strategy and business development with Myer and he had also been hired for a senior executive role at Inditex owner of Zara and the recruitment firm Carmichael Fischer. At this level you would have expected that there were stringent screening procedures overseen by experienced professional recruiters who have the ability to weed out potential fraudsters and that those designated by the company to undertake the interviews would have been able to find the chinks in the fraudsters armour. But alas this was not the case and Flanagan went on to join these companies that are now dealing with the issue of reputational damage.

The salutary lesson here is that if a fraudster can trick his way in to major corporates then there are many others who set their sights on less ambitious targets and a position in your business might be one of them. Before you dismiss this case as not being an everyday occurrence you should give some consideration to the bulk of fraudsters who trick up their resumes using information that to the uninitiated may seem valid.

The exaggeration of achievements is a common target for fraudsters and often they will do so to the extent that it will not seem overstated and subject to question. Smoothing dates of unemployment, unfinished courses of study not enrolled for or have not been completed, job titles that have elevated the seniority of a role, professional designations that have not been awarded, professional associations to which there is no membership or where it has lapsed, voluntary work not undertaken and the list goes on.

Fraudsters treat interviews as a challenge and they often prepare themselves as actors readying themselves for the first night of their performance. They rehearse interview questions through Googling a range of websites that carry a wide array of questions including those designed to draw out behavioural characteristics. Additionally, there are a plethora of books and articles that contain detailed guidance as to how best position your-self in interviews with a number advising on how to manipulate the interview process.

Armed and dangerous they are now ready to assail your business but there are measures you can adopt to ensure that you are in the best position to sort out these fraudsters. Your starting point is in the planning of your recruitment strategy where you should give consideration to the resources you will need to undertake the recruitment program. This will include your decision to DIY or engage the services of a professional recruiter. If you decide to DIY then you need to make sure that you have the experience and the time to devote to the recruitment process which will include the search for and screening of relevant candidates over a six to eight week period. Alternatively, if you think you are better suited to working with a recruiter then you need to ensure that they have a track record of placing positions similar to the one you are seeking to fill and that you feel that you can work well with them.

Recruitment is one of the most challenging business activities that you can undertake particularly when you may be faced with fraudsters who are intent on joining your business. If you are unsure as to which option is best suited to you then you might consider drawing on the advice of those who have the experience to provide you with the guidance you need.

Successful Recruitment – Transforming your business through best practice has been written by a former financial services executive who has worked as a recruiter over the last twelve years in conjunction with a senior human resources consultant. The new edition of Successful Recruitment provides you with balanced guidance as to your recruitment choices and includes a range of tips and tools to help you avoid the costly pitfalls including how to conduct interviews and undertake diligent candidate screening.

To help you make the right decisions and avoid the costly pitfalls of recruitment, Successful Recruitment is available on Amazon. 

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Peter Dawson

The SLICE survey conducted by Peter Dawson of the Dawson Partnership and Susan Rochester of Balance at Work found that financial planners are averse to using recruiters as they believe their fees are prohibitively high but then end up with considerable unforeseen costs associated with doing it themselves.

More often than not these ‘hidden costs’ of DIY prove to be very expensive in terms of the resources required, including the business owner’s time and that of staff supporting them.

These burdensome costs can be avoided by taking on board the advice is contained in the new edition of Successful Recruitment – Transforming your business through best practice.

Successful Recruitment puts you in the driver’s seat with all the requisite tips and tools for making an objective business decision about what will work for you in a recruitment program.

‘It is important that when you are looking at hiring a new staff member that you come from an informed position as to what is involved, so what we have done is not only provide detailed guidance as to how to go about a DIY recruitment program but how to deal with recruiters and understand what the real cost will be to your business’ says the author, Peter Dawson.

Included in this edition is a cost calculator that allows you to accurately understand what it will cost your business to DIY and from there you have the information you need to compare this to the fees charged by a recruiter.

‘You might find that there isn’t as wide a gap between the costs to your business to DIY and recruiter’s fees as you thought. When you look at what a recruiter can do in terms of candidate identification, screening and management through the recruitment process, less emphasis is placed by the planner on the cost of the recruiter’s fees and more on the value they are able to add to the recruitment process.’

There are certainly enough war stories out there of failed recruitment programs where recruiters have been involved, causing many business owners to shy away from using them. In this book the DIY approach is covered in detail, with extensive advice and guidance that will enable even a novice to undertake a successful recruitment program.

Successful Recruitment is focused on enabling business owners to not only make an informed decision about how to go about the recruitment program but provides case studies and a range of tools that are used by recruiters. These are the building blocks of a recruitment program, including practical guidance for putting together an effective recruitment strategy, interview and reference questionnaires and candidate assessment.

To help you make the right decisions and avoid the costly pitfalls of recruitment, the new edition of Successful Recruitment is available on Amazon.

The post Recruitment costs too much – Financial planning practices going it alone with costly consequences appeared first on AdviserVoice.

The SLICE survey is conducted nationally in March, July and November to canvass the opinions of independent financial planners on a broad range of industry and business issues. The first SLICE survey was conducted by Peter Dawson of The Dawson Partnership and Susan Rochester of Balance at Work in November 2013. Here’s a small sample of the results that survey uncovered:

• 32% of practices increased their headcount in 2013, with 13% expecting the implementation of FOFA would lead to them employing more staff in the future;
• 18% use social media as part of their recruitment process;
• In selecting staff, 21% of respondents always use behavioural profiles and 20% always use knowledge based test.
• Half the practices surveyed increased their training spend in 2013, but 13% spent less on training;
• 23% rated the support they receive from their licensee for recruitment and people management as ‘good’ (16%) or ‘excellent’ (7%). A further 25% rated it as ‘satisfactory.’

The latest SLICE survey, ‘SLICE 2’, has focused on three key areas confronting financial planners:

• Business growth
• Succession planning
• The proposed FOFA amendments

We would like to thank all survey participants who took the time to answer our questions so thoughtfully. You have generously added your voice to a deeper understanding of the issues that affect your profession.

1. Business growth

Sources of revenue growth

The vast majority of respondents (96%) intended to grow their business revenues in 2014. When asked how they will grow their businesses, 65% of respondents stated that their focus is on organic growth. None of the respondents to this survey plan to grow their businesses through buying a book of clients or through acquiring or merging with another practice.

Follow up interviews revealed that most respondents who favoured organic growth did so due to
there being no negative legacy issues that could prove a distraction to the business tying up resources and adding unforseen costs. There was also a concern that there could be ‘client slippage’ and the book could shrink over time reducing the value of the initial investment.

Growth strategies

The dominant growth strategy for those planning to grow their client base is referrals from clients (81%) and centres of influence (71%) while prospecting for new clients outside of referrals accounted for 23%. Almost half (48%) intend to attract more clients through networking. Other ways respondents plan to grow their client base are through social media, seminars, publishing and corporate services.

Staffing for growth

When asked who is responsible for generating business growth in the practice 81% of
respondents stated that the business owners are directly involved in planning for growth in the
business and take a hands-on role in implementing the growth strategy. Only 52% of the
respondents have staff other than the owner(s) with the capacity to bring more revenue into the business.

Given this, it was interesting to note that recruiting another financial planner to help grow their
business is in the plans of 10% of respondents. When they were asked what was most important
to them when hiring 60% selected skills with 20% each indicating attitude or reputation as most
important.

When we asked what respondents considered would be the minimum qualification for a financial planner they would hire, there was a wide variety of responses, with 40% citing DFP as a minimum while others expected the advanced diploma (ADFP), a degree in financial planning or a degree in a related discipline with a DFP (20% each).

‘We are not planning to hire however would accept nothing less than a degree qualification, or worst case, working towards a degree.’ – Survey respondent

Servicing growth

There was a high level of confidence from respondents in their ability to service growth (92%) while 94% were confident that growing the business would lead to increased profitability. Those that didn’t pointed to the need for increased infrastructure that would initially increase costs that would absorb any potential increase in profit.

When asked if respondents will change the ways they operate to increase the potential to increase profitability, 69% stated that they would, with most stating that this wouldn’t require a major overhaul of their business. Scaled advice figured in the plans of 52% of respondents with most adding that they would do so mainly for family and friends of existing full service clients and that this would not be seen as a core part of their business.

‘To grow substantially I need to build capacity by employing an adviser and additional staff. In regional areas the level of skills / knowledge of potential recruits is below the level I need for my business. These potential recruit also believe they are at a level that will attract a remuneration that exceeds their capability to bring in the necessary income. Recruitment of suitably qualified staff is an issue in the regional areas.’  – Survey respondent

Target client demographics

‘The backbone of our practice is small business owners who come to us for their accounting work which gives us a chance to explain the value of our financial planning services. Our strike rate is high in converting our accounting clients to financial planning clients and they then refer business to us.’ – Survey respondent

The four main demographic targets identified by survey respondents were small business owners (68%), retirees (48%), middle income earners (48%) and high net worth clients (35%). See graph.

2. Succession planning

When asked about the current status of their succession planning, only 20% of respondents have a comprehensive plan in place. Of those who had a comprehensive plan, 60% said that they had put it together with the assistance and advice of a business consultant and/or their licensee. In contrast, 30% of respondents haven’t started planning for succession. (See graph.)

Drilling down into existing succession plans revealed that although in 100% of cases a likely
successor had been identified who had the confidence of the business owner in terms of their
ability to run a successful practice, the process was not complete in every case. The table below
show the gaps in terms of other factors, such as valuation methods, finance, timeframes, transition roles and responsibilities and documentation. All these factors are critical to a smooth exit plan.

‘Succession planning is a critical business issue with three business owners who are in their midfifties. We have an agreement in place that allows for a smooth transition as each of us exits the business over the next five to ten years.’ – Survey respondent

3. FOFA reforms

Asking if the proposed changes to FOFA (before the current freeze on those changes) will have a positive impact on business generated a spread of response. Half of the respondents answered ‘yes’ while 28% answered ‘no’. A ‘don’t know’ response was received from the remaining 22%.

‘We have geared our business to the original legislation and the changes will lighten the load in terms of administration and compliance but not to a considerable extent.’ – Survey respondent

Of those respondents expecting the change to have a positive impact on their financial planning practice, 52% stated that the positive effect was due to ending client confusion. Several commented that their clients had seen considerable commentary on television and print media and were unsure what the effect of the proposed amendments would be.

Favourable comments from respondents about the impact of the proposed changes on individual practices included: ‘Increased consumer awareness and ability to understand why we are unique in the marketplace’; ‘It supports our value proposition’ and ‘Highlights differences between the majority of the industry (controlled by institutional product providers) and niche advisory businesses which will focus on client relationships’.

44% of respondents expecting a positive impact on their businesses thought the amendments would end industry confusion while 40% expected they would lead to less administration resources being needed and 32% indicated the amendments will free up business owners time to attend to their clients’ needs.

The responses to a second question about FOFA that asked ‘Do you believe the proposed changes to FOFA will be positive for the public perception of financial planners?’ indicated a wide range of opinions and a level of uncertainty about the likely outcomes.

A total of 48% of respondents said they believe changing FOFA will be positive for the industry while a significant minority (36%) expect the changes to have a negative impact and 16% were not sure. While some believed the public don’t know or care about the changes, several of the comments in the survey expressed frustration with the media handling of proposed amendments.

‘The proposed changes to FoFA will only have a positive impact on the public if/when the media stops being so ignorant about what financial planners do, and how they interact with product providers. The media should also become a little more conversant with legislation as it currently exists. It would be nice to think that financial publications actually vetted their articles for correctness, or where they are too time poor to do that, clearly label them as OPINION ONLY.’ – Survey respondent

Further comments

Respondents were given the opportunity to add some general comments at the end of the survey. Many of these have already been reported above. We also recorded the following:

‘It would be extremely helpful for the development of the financial planning profession if the Industry Super Network would embrace the value professional financial planning can bring as opposed to continuing to demonise commission and virtually all other participants. I live in hope!’ 

and

‘The FPA needs to lift the education level which I feel is too low at this stage before it thinks about being classed as a profession. Also more effort needs to be taken to counter the Industry Super advertising. All they seem to be worried about is increasing member fees and there glossy magazine.’

Respondents to the SLICE 2 survey

Concluding remarks

The SLICE2 survey has revealed that financial planners’ core focus is on building sustainable
growth in their practices derived predominantly from referral business from existing clients. This
is not good news for business brokers as none of the respondents said that they were looking to acquire client books and or buy or merge with other practices.

The FOFA ‘roll-back’ amendments to legislation, proposed prior to the survey then frozen, are
seen as a positive for planning practices with a number of principals stating that the legislation will help differentiate their businesses from institutionally owned businesses.

While there has been a significant push by licensees and practice management consultants to raise awareness for the need for succession planning only 20% had a comprehensive plan. This indicates there is still more work to do although it is encouraging that 26% said that they are in the process of putting a succession plan together.

It will be interesting to see what financial planners tell us as we revisit these issues annually in future surveys.

——–

Peter Dawson is the Director of The Dawson Partnership and Susan Rochester is the Director of balance at Work.

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New SLICE survey: people management strategies in financial advice practices

The second SLICE financial planning survey examines a range of critical issues confronting financial planning practices, topics that challenge practices’ efficiency, profitability and viability.

The SLICE 2 survey provides financial planning practice owners and managers with an opportunity to quickly and easily share their views and insights with their peers, to build an understanding of trends across the sector.

Survey authors, Peter Dawson of The Dawson Partnership and Susan Rochester of Balance at Work, were thrilled with the response to the first SLICE, held in November 2013. Here’s a small sample of the results the survey uncovered:

• 32% of practices increased their headcount in 2013, with 13% expecting the implementation of FOFA would lead to them employing more staff in the future;
• 18% use social media as part of their recruitment process;
• In selecting staff, 21% of respondents always use behavioural profiles and 20% always use knowledge based test.
• Half the practices surveyed increased their training spend in 2013, but 13% spent less on training;
• 23% rated the support they receive from their licensee for recruitment and people management as ‘good’ (16%) or ‘excellent’ (7%). A further 25% rated it as ‘satisfactory’.

The second SLICE survey looks at business growth, succession planning and the impact of the proposed chances to FOFA. The survey takes than 5 minutes to complete.

Click here to complete the survey.

When you complete the survey, you will be able to access a copy of the results of the previous survey.

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