Seeing business development from the planners point of view

It is often said financial planners are excellent at doing their own job, but are the world’s worst business people.

The simple solution to this problem is to bring in the business consultants, but the difficulty is that very few consultants understand a financial planning practice.

A Melbourne-based financial planning firm has now moved into business consulting and argues it does understand the problems from both sides of the fence.

Barrington Strategic has evolved from a financial planning firm that also has funds management and accountancy among its skills.

Matthew Tol from Barrington Strategic says the idea for developing a separate consulting arm started internally.

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“About three years ago, we produced a strategic plan for our own business, Barrington Funds Management. We then saw an opportunity to provide this service for our clients and other firms,” he says.

The aim of a review is to provide a framework for where a business will be in five to 10 years time.

“We are making sure a business remains relevant and gives value to the customer during that period. We see every company as a service business that is servicing the client, for example, delivering financial advice.”

However, what defines one planner’s business from another is how they define the needs of a client’s business. According to Tol, this is the way to secure a competitive advantage.

The first stage of a gaining that advantage involves Barrington spending time with the client getting to know the business.

“However, it is important we do not get to know too much, so we end up with a preconceived idea,” Tol says.

These meetings involve management and staff talking about the business and their thoughts on problems and directions.

“What I try to get across is for everybody to rise above the day-to-day running of the business and look at what is happening more widely. Often people are so close to the business that they can’t get an overview,” Tol says.

The first serious discussions about the business are generic and identify the problems with the business in areas such as staff, technology, marketing and the product mix.

The involvement of staff depends on management, particularly if one of the problems identified is staff based.

“If there are problems, we will often opt for individual consultation with the staff. We ask people about their goals. We are not working on who will have to go,” he says.

Discussions with staff often identify problems such as career progression and the goals the employee is hoping to achieve. Tol says these aspirations are not always recognised by management and the staff potential is wasted.

“What staff usually identify are lots of small problems that can usually be fixed up easily. The staff are also a resource because they have ideas about where the business is heading.”

Often at this point the staff will be involved in a brain-storming session to identify the opportunities that can then be included in the strategic plan for the business, with the sessions designed to raise ideas in a non-confrontational environment.

The review of a business includes looking at management.

“A business might have stagnated and we have to look at creating the environment for change. However, if change comes out of the blue, the staff will resist and be scared of it,” Tol says.

Barrington’s role, according to Tol, then is to show staff the new opportunities that change can bring and teach them not to be scared.

Creating the strategic plan can involve the business owners, management and the staff, but the final decision as to who will be involved is ultimately up to the adviser as the client, Tol says.

“The planning could be over a day or a week, it depends on how much we have to cover,” he says.

Normally the strategic plan meeting will cover a variety of issues including a strength, weakness, opportunities and threats (SWOT) analysis, where the business is at now and where it can go to, who the customers are and what do they need, writing a mission statement, creating a sustainable competitive advantage and producing a one-page business plan.

“We try to identify what the client enjoys doing,” Tol says. “If we can get the client to focus on what they enjoy doing, then the business takes a massive lift.”

On average, clients see 20 per cent of the business as enjoyable and this helps them focus on what the business must do to remain relevant, he says.

After the strategic planning session, a plan is presented to staff.

“You have got to get the staff to accept some ownership of the plan and for them to see themselves as part of it, before change can happen. After this, we revisit every three to six months to review changes and action plans, so that any problems that have evolved can be identified and fixed,” Tol says.

The whole process to achieving the strategic plan can take as little as three or four days, but Tol says it normally takes a couple of weeks.

“We see ourselves acting like a mentor to the business, as we help them focus on their goals,” Tol says.

One financial planning firm that has used Barrington Strategic is Collins House Financial Services.

Managing director Dominic Alafaci says Barrington helped his business corporatise.

“Every financial planner needs a financial planner and these guys didn’t have a lot of baggage,’ he says.

“They were not biased towards anything, yet they understood how financial planning works, unlike many other consultants.”