Consumer trust isn’t something to be taken for granted, but reports from the UK, US and here at home are all pointing towards an uplift in trust levels around financial advice, which can only be a welcome development.
There are significant tailwinds behind the financial advice industry at the moment, but some major obstacles are still preventing advice practices from taking advantage of surging demand according to a new study from CFS.
The advice business that thrives will align towards its true niche
2023 may well be remembered as a watershed year for the financial advice industry. After several years of strangling regulatory change, the Royal Commission chains are slowing being removed and the industry looks set to be reborn as a profession.
With all this change comes a new challenge, which is an age-old one for many; the ability to attract and service a growing number of clients.
Accordingly, the most common issues advisers are facing are around efficiency and scalability.
The swift exit of the major banks and financial institutions from financial advice has seen thousands of ‘orphaned’ clients seeking out a new adviser, at the same time that the headlines have reiterated the value of financial advice.
With the recent announcement by financial services minister Stephen Jones that the restrictive over-kill of opt-in and consent forms could be reduced as soon as next year, there are few excuses for advisers to open the door to more clients.
Most financial advisers I meet have one thing in common, an enduring motivation to help as many people as possible. For many, this is what led them into financial advice in the first place, yet it is not conducive with running both a scalable and profitable business.
While not every adviser is focused solely on profitability, history has shown the difficultly in servicing clients of multiple cohorts and backgrounds and doing so while adding significant value to each of their situations. Accumulators and retirees are the perfect example, requiring significantly different service levels but more importantly, skillsets, to truly act in the best interest of clients.
The future, like it or not, is niche.
The most successful businesses both inside and outside of financial services become the best via their ability to narrow down their service or product to what they do best. This allows a laser-like focus on client experience, expectations and the user journey.
The Q&A section of any financial advice or investment event is case in point of the risk of generalities, with most advisers asked to consider anything from life insurance to superannuation, pensions, Centrelink, aged care and investments on any given day.
Within my business, our focus is squarely on retirement. Our history and longevity has seen our team grow the experience and skills to support Australians during this incredibly challenging time, dealing with both the financial and emotional aspects.
That isn’t to say this niche is for everyone. For some, cash flow or debt planning, aged care and Centrelink can be a niche. Similarly, an investment approach can still act as a differentiating point, with a focus on responsible investment case in point.
The key with selecting and running with any niche is that the business, language and team must be aligned with one common goal.
So, what’s your niche?
