Many are viewed as being vulnerable. Or the weak link of the financial planning industry. However, for many younger practices in the running for podium standing, being the youngest is often an advantage.
Young practices are those practices that have been in the industry for less than 12 months and who hold a small client base and small number of staff, with a reasonable but still rather small funds under advice number.
Apart from seemingly being under staffed the younger practices that try to compete with the corporate prowess of major financial planning groups and dealer groups find it a stressful and tedious existence.
Carol Davis and Associates financial services consultant says it is crucial for a practice to first define their target market for them to properly survive.
Davis says this process of properly targeting individual markets and sticking to that particular market is one of the hardest jobs for a practice just starting out.
“People need to get to know their market. People interested in starting practices must talk the language of the market,” Davis says.
“People will continue to try different things until they work on maturing the ideas of their targeted market and are happy with the direction their group is going.”
Paul Resnik and ING commissioned Davis earlier this year to conduct a survey to find what makes and what it takes to become successful advisers.
Almost 20 financial planners from around Australia partook in The Resnik/ING Opinion Leaders’ Survey, which covered a range of industry issues including target marketing.
Davis found there was a wide range of marketing strategies and business plans undertaken by the individual planners’ groups.
According to Davis, one of the participants, Moneywise founder David Loadsman stood out as being one of the younger practices properly targeting his market.
Loadsman, the Central Coast based planner, founded his group in 1999 with a staff of three people. His business has grown in leaps and bounds from then to a staff of 12, including two financial planners.
Loadsman offers clients home loans, refinancing, gearing strategies, superannuation and investment advice.
His target market is focused firmly on people with $60,000 or more in household income per year and those who hold equity in their own home. His clients include small business owners and employees who are middle level managers.
As the younger practices do not have the experience and support of branding, to overcome the stress of large competition, smaller practices need to take it upon themselves to define and focus solely on a particular target market.
“Loadsman has outsourced his marketing. As he is in a regional area he has started shopping centre promotions to help target his market,” Davis says.
She says that Loadsman did not outsource his marketing because he could not handle the responsibility of devising a marketing campaign, it was simply so he could concentrate solely on the workings of the practice.
“The ideas some people, including Loadsman came up with for marketing came from people going to conferences and picking up on other ideas,” Davis says.
“Successful people tend to visit other groups or overseas conferences to constantly improve on their own business plans and marketing structure,” she says.
Davis says there is a while range of target markets within the financial services industry. She says the types of target markets she came across while conducting her survey ranged from corporate superannuation, general insurance, and stockbroking.
“The range began at the lower end with clients with household income of $60,000 to higher levels of clients with $100,000 plus a year with large assets,” Davis says.
