Focus on fundamentals, not fads
FINANCIAL planners worldwide struggle with the same problems when they are running their own businesses, says Money Managers managing director Kevin Bailey.
The three problems are how to grow their business, how to manage their business, and how to exit their business, he says.
The most successful financial planners worldwide work to a set formula, Bailey says.
This includes having fewer clients and servicing them well, being problem solvers and not product pushers and providing a range of solutions.
“It also involves focusing on fundamentals and not chasing fads, while gaining leverage of partnerships with financial institutions,” he says.
“You also need to be committed to education.”
Bailey has set out a ground plan for planners wanting to develop their business and put in place succession planning, based on a 10-year time scale.
“It takes five years to build a business, five years to let go and a lifetime to go for it,” he says.
“A business is an asset, not a job.”
Bailey says the principal must work on corporatising their business to ensure efficiency and to ensure there is a structure for when the time comes to implement succession planning.
To achieve this, the principal must embrace the opportunities that are presented and be committed to change.
“They must be prepared to make hard decisions and think outside their comfort zone,” he says.
“The principal must also be committed to capital expenditure on infrastructure development and have the ability to critically appraise their business.”
Bailey says there are practical considerations for ensuring the efficiency of the practice.
“Use a single platform for your entire business and build strong relationships with a few institutions,” he says.
“Work in partnership with others, but maintain ownership of your own destiny.”
Bailey also warns the principal must have the ability to walk away from the partnership — if things don’t work out.
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