Much has been written about the need for younger people to have access to financial advice and, according to a survey we recently carried out with 150 advisers for our latest publication The Insiders’ guide to business efficiency, it’s an issue worrying over a quarter (26%) of advisers.

    While many people under the age of 30 may not have significant assets to invest right now, a Capgemini report last year highlighted that many in the profession are not ready to manage the upcoming intergenerational wealth transfer and that around four out of five beneficiaries will switch away from the original adviser when they receive inheritance. 

    Clearly, finding a way to keep the surviving family of older clients with the firm is an issue that merits some careful thought by advisers.

    Other concerns

    Our survey also found that almost a quarter of advisers (24%) are concerned about compliance requirements and pressures, with 23% worrying about how to deal with unprofitable clients.

    Alongside the survey, we hosted a roundtable discussion on the topic of business efficiency with 20 advisers. The key conclusions from their collective thoughts were:

    • Two of the most significant risks to a viable business are 
      • the inability to grow profitably
      • growing too quickly  
    • Two of the biggest frustrations amongst advisers regarding technology are
      • knowing which tool or application is the ‘best’ 
      • the lack of integration between systems
    • Two key ingredients for efficiency gains are 
      • being proactive to solve issues (fire prevention rather than fire-fighting) 
      • allocating time to address inefficiencies 

    A Kitces Research study in 2019 revealed that the typical financial adviser spends no more than about 50% on direct client activity-related tasks, and barely 20% of their time actually meeting with clients.  

    Being busy with multiple tasks creates a tendency for adviser business owners to “paper over the cracks with people” but scalability without extra staff is possible with the right technology.

    However, a quarter (25%) of those we surveyed highlighted that technology is creating frustrations, so getting it right is a major hurdle that has to be overcome. Time spent researching and investing in the right tech can and does result in systems that deliver enormous efficiencies for firms of all sizes.

    There are no downsides to delivering business efficiency gains but it does require focus and effort. The first step is to identify the cause of inefficiency. Our guide outlines some of the obvious places to start, including:  

    • recurring mistakes 
    • unhappy clients  
    • inadequate service levels 
    • frustrated colleagues  

    The major benefit of spending time to build an efficient business is that it can be scaled, enabling profitable growth without the stresses and strains of constantly fire-fighting issues.

    To find out more, the Insiders’ Guide to Business Efficiency is available to download free via this link

    By Ben Peele, UK Managing Director, PortfolioMetrix

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