Single-office Australian Financial Services Licensees (AFSLs) that design and deliver their service in line with best advice objectives will be successful in the future, according to the head of Actuate Alliance Services, Dan Powell.
Powell described the demand for quality advice by Australians as the one constant in an evolving financial services industry, adding that licensees and their advisers needed to be ‘progressive' in embracing two mutually inclusive components: best advice and best practice to leverage that demand.
"By ‘progressive' we mean placing clients at the forefront of their business, while developing efficient operating solutions that deliver on the service promise and embrace the post-Future of Financial Advice (FOFA) reforms," Powell said.
Powell said the challenge was defining what ‘best practice' should be at the adviser, practice and dealer group (AFSL) level. He advocates single-office AFSLs implementing business process solutions which ultimately translate to comprehensive overall practice efficiencies, whilst keeping control and culture intact.
He said these progressive AFSLs were creating simple client service segments based on services, pricing and portfolio solutions, enabling advice businesses to grow their client base at a lower cost to clients, whilst improving practice EBIT.
"These businesses are actively reviewing their processes and outsourcing services and that will ultimately increase their client-facing time from current levels of around 30 per cent to around 70 per cent — this will be good for their clients and good for business," Powell said.
"Businesses which move with the times will also be more attractive when the time comes to sell."
However, AFSLs choosing to keep stagnant business models in order to minimise change, will struggle.
"Having a singular focus to hold on to grandfathering arrangements will increase the complexity of an advice business and will eventually detract value," he said. "In order to be profitable now and in the future, single-office AFSLs need to evolve their business model and constantly seek better systems and processes.
