This is an article by Warren Gibson, who is a Director of Præmium Australia Pty Ltd.
Præmium is fine tuning its' marketing and sales strategy to more closely align it with the business requirements of accountants and financial planners.
Market conditions brought on by the Global Financial Crisis saw sales fall over a few months from December 2008. Consequently, many financial advisers reported their inaction or lack of decisiveness were mainly due to being bogged down with client issues and deciding how to structure their business post the market fall so as to ride the upswing and reposition themselves for the next inevitable cyclical downturn.
Another consideration for many was maintaining the value of their practice for eventual succession or potential aggregation. Of course, the continued growth in the SMSF sector is an attractive proposition but one that brings with it a whole world of complexity.
Præmium's Sales Director, Warren Gibson, reports that the sales pipeline is filling once more for technology providers as advisers come to grips with what they need to do and begin the search for business tools that will help them get there. It's a very competitive field.
"Our role is not just about sales and adding portfolios to our V-Wrap portfolio service. It is about building long term relationships and adding value to advisory firms by more closely aligning our service to their business requirements. We are now beyond selling our service to just any practice. We want commitment from our clients in return. By that I mean they must ensure they can resource changes in their business, get staff buy-in, be prepared for the change-over and the extra work that change brings in the early stages. Those that do report increased revenue, happier clients, contented staff and that feeling of being in control of their business, that money just can't buy".
According to Gibson the requirements of most advisers digging in for the long term can be summarised as wanting to run their business as a business, and all that entails; i.e. retention and ownership of the client, control over the investment and reporting process, ability to lower the cost of investing for clients, establishing independent practice revenue not reliant on fund managers and platforms, and distancing themselves from the media glare and pressure being brought on by the ongoing debates around fees and impartiality or appropriateness of advice.
These issues also apply to a large number of accounting firms, those that have ventured into the financial planning/advice space or established alliances with financial planners or dealer groups. Accounting firms are often the forerunner of a financial planning practice, and similarly experience pressure on fees from their clients.
In Præmium's wide experience with accounting firms most, if not all, don't charge for all the time they spend on a client so they need to introduce efficiencies into their business to compensate. Many prefer the fee for service model because it aligns with how they charge for accounting services, and they don't want to be drawn into the commission debate or lumped into that group of product salesmen.
Præmium's consultative approach to both these industry groups will be backed up with solid market data from surveys and research papers externally sourced.
Last year, Præmium initiated a Relationship Development Team to on-board new clients and their portfolios into V-Wrap. This has helped many practices restructure their business faster, providing not only training but portfolio setup, data migration, portfolio reconciliation and so on.
Looking ahead, not only is the advice industry set for change but also investment options are changing as managed accounts start to attract serious interest and increasing market share. Mr Gibson's advice is "Don't be dragged into change, embrace it early. Those who do reap the rewards."
Disclaimer: The information in this publication is of a general nature. While Præmium Limited and its related bodies (‘Præmium') endeavour to provide accurate and timely information Præmium do not guarantee that the information in this publication is accurate at the date it is received or that it will continue to be accurate in the future. Views expressed by contributors and/or services described which are provided by third parties are not necessarily endorsed by Præmium. No responsibility is accepted by Præmium for the accuracy of that information, and Præmium in no way takes any responsibility whatsoever for material contained on external websites referred to in this publication.