Diversification not always the answer
Financial planning practices need to look into new ways of ring fencing their clients in the current economic environment, but diversification of services might not always be the answer.
According to Macquarie Practice Consulting associate director Fiona Mackenzie, diversifying could often be a costly process, with practice principals having to apply for multiple licences, and find and train new staff.
Instead, Mackenzie said creating referral partnerships with other specialists - such as risk advisers, accountants, mortgage brokers and legal professionals - is a good alternative to one-stop shop models, which many claim are making a comeback.
Aligning with other specialists helps financial advisers make sure all of their clients' needs have been met.
"There is much discussion in the industry about diversification, but if you have established a niche and do something well, keep doing it," Mackenzie said.
Establishing referral partnerships with other professionals in the industry was one of the quick ways advisers could adapt to ever-changing adviser needs.
Mackenzie's 10 tips for 2012 will be published in Money Management in print and online early next year.
Recommended for you
Far too few wealth managers are capitalising on the opportunity presented by disruptive technology to deliver personalised investment solutions to the mass affluent demographic, according to PwC.
With over half of advisers using managed accounts, HUB24’s head of managed portfolios has unpacked the benefits driving their usage and how they can be leveraged by advice practices.
The FSCP has announced its latest verdict, suspending an adviser’s registration for failing to comply with his obligations when providing advice to three clients.
ASX-listed platforms HUB24, Netwealth, and Praemium have used their AGMs to detail how they are using artificial intelligence to improve their processes and the innovative opportunities it presents.
