The burnout risk in mid-tier advice firms

Advice directors and practice principals are often overworked and wearing too many hats in mid-tier advice firms, underlining the need for external business support.

Jaimie Ramsey, founder and principal consultant at Advice Business Consulting, provides practice management services to financial advice firms.

Prior to launching Advice Business Consulting last month, Ramsey reflected upon her 20 years’ experience in the financial services industry, including 16 years in practice development manager positions across multiple licensees.

She observed that middle-tier advice practices, typically those with two to six authorised representatives, and the directors that lead them, are often under intense pressure.

While these practice principals are successful in providing financial advice, they may be less well-versed in the other challenges that come with growing a business.

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“They’re not a compliance person. They’re not a marketer, not an HR manager or an IT systems analyst. There’s all these other hats they wear that have been forced upon them, which they may not be good at and may not want to do, but they’re a necessary evil,” Ramsey told Money Management.

Managing the various roles of running a mid-sized practice can be more overwhelming than working at a smaller firm focused on generating profit and a larger business which has the benefits of scale, she said.

“If you take a step in the middle between the two, that’s where people really need the help. [Practice principals] don’t have time to make the changes that they would love to make in their business because they’re all working long hours. They’re not taking enough annual leave. They’re taking their work home. They’re always just working, and it’s exhausting. 

“I worry that there’s going to be a huge amount of burnout in these mid-tier practices because they try to be too many things to too many people,” she explained.

More broadly, research has revealed the evident rise in advisers’ stress levels. A survey by financial adviser Phillipa Hunt and Forte Asset Solutions found 95 per cent of respondents said their stress levels had slightly or significantly increased since the Hayne royal commission.

Easing the load

Ramsey’s comments echo a session at the recent Financial Advice Association Australia (FAAA) Congress in Adelaide, which covered dealing with burnout among financial advisers. Around half of the advisers polled said they were either “surviving” or were already burnt out in their business.

Amanda Balcombe, health and mental fitness expert at Still Wellness, recommended advisers “catch it, check in, and tool up” when it comes to dealing with their stress load. Burnout could be demonstrated in a variety of ways, including anger, disorganisation, poor sleep, headaches and forgetfulness.

She provided tips such as turning off email at night, spending time in green spaces, regular check-ins with team members on their wellbeing, and ensuring healthy nutrition and exercise.

For Ramsey, her consultancy provides ongoing business support to alleviate the workload stress for advisers. She ensures their business plan is in alignment with their goals and develops a 12-month plan, which includes staff KPIs.

“There’s so many different things that practice principals always have to be across – they literally can’t be everything to everybody. That’s where I can come in to lighten the burden and spread the load, so they can put some of that brain power towards actually growing their business.
 
“I’d love to see advisers having a better quality of life. If they’re happy, that all flows down through everything – to their staff, to their clients – and everyone succeeds.”