What advisers need to make right decisions

Financial advisers, who feel overwhelmed by the choice between going self-licensing or joining a licensee, will need to use the objective framework which will allow them to review all the options and make the best possible final decision reflecting their individual circumstances, according to Rekon Group.

The firm, which specialises in management consulting and provides structured problem-solving tools for “humans working together in high-pressure environments”, believes that advisers are currently facing once in a generation industry change and need to understand the way they structure their decision making process will have a tremendous impact on their own future as well as their clients’.

According to Rekon Group’s managing director, Peter Winnall, at times of current uncertainty it is more important that individuals and organisations were armed in the right tools that would enable them to deal with any issues in the best possible way.

“The approach we take is not necessarily to try to give people the specific metrics and the likes that they should make a decision on that – although we do have those tools – what we are more interested in is leading them through a decision making process so they can input their own information in, that is relevant to them, so to make the best possible decision or help them to make the best possible decision in their individual circumstances,” Winnall told Money Management.

“The way we help [organisations] is to help them look at all the different options, such as self-licensing or going to adviser firm, but our approach is not based on ‘you need to look at those metrics’  but it is rather about giving them the tools so they can make the decisions themselves because the metrics might change.”

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Rekon Group, which recently worked with CentrePoint Alliance on strategic planning facilitation, identified a five-step decision-making framework aimed at helping organisations achieve their ultimate goals. The process included describing their environments, establishing objectives, creating the options, identifying both opportunities and risks, developing and deciding and executing and evaluating the outcomes.

“The first step of the process is about describing your situation and the environment and in that step what you want to do is you want to look at all the different factors that may impact on your decision so in the case of financial advisers it will be the outcomes of the Royal Commission, the practice , compliance, regulations or the different education requirements but also things like what are your personal goals are. It is not just about the industry dynamics and all the different providers but also your personal circumstances,” Winnall said.

According to Rekon’s director, people also often looked at the circumstances as at what they want to see and “not what actually is there”.

“They look at the goal, and the goal is usually what they are trying to achieve and they often ignore the ‘why’ element in their decision-making process. Getting people to deliberately think about why they are making that decision is probably the biggest challenge,” Winnall said.

As far as the key factors for financial planners were concerned, Rekon Group identified repricing as  one of the biggest challenges given that the grandfathered commissions would be ceased from January 2021 and planners would need to manage the transition to a new revenue models where pricing was a significant part of that.

Other factors might include the regulatory compliance and changes, consolidations of licences, how the licensee can potentially help advisers through the changes, the efficiencies of the business and what they want out of their business and their life.

“My advice to [advisers] is no one knows what is going to happen in the future but the thing that they can control is they can make their decisions based on the best possible information that they have now,” Winnall said.

“If they go through a consolidated process and they learn the process how to make important decisions at least they can go to bed at night with a piece of mind knowing that they considered it fully with their right personal criteria and think ‘I have had made the best possible decision that I could have at that time’ and they will not look back and think ‘I could have thought about it more’.”