The food chain of financial advice has long been the wrong way around and needs to change, says Implemented Portfolios’ co-founder and chief executive of strategic development Santi Burridge.
Speaking at the recent Financial Standard Managed Accounts Forum in Melbourne, Burridge encouraged delegates to dismiss the traditional business structures that have hindered the financial advice industry.”At the top of the food chain has always been expensive investment management and we have had far too much focus on platforms. We haven’t created any ability to mass-customise. It’s all been one by one, review by review, product by product and paper by paper with no real control over it – this needs to be fixed.
“Currently advisers are at the bottom of the food chain defending someone else’s decisions. Advisers need to be at the top of that food chain, taking control,” he said.
“With managed accounts, we can control that the client beneficially owns every asset, we can control tax, we can control things that are really important to people – their preferences, their journeys. We can control implementation so, in my mind, the ability to mass-portfolio customize for an IMA means we control how quickly we implement money, how quickly we re-model.”
Burridge also told delegates that technology – particularly implementing the ability to mass-customise with IMA’s – is fundamental to building a scalable business.”Technology should be at the core of all advice businesses and mass-customisation is critical to the success of advice businesses. The ability to mass-portfolio customise is everything, it will unlock all of the true value in your business.”
Burridge believes that all of this, coupled with a sincere focus on human connection and building strong client relationships to better understand their needs and objectives will result in greater consumer trust of the industry.
Burridge strongly believes that being non-aligned and taking control of your own business and advice offering is the key to achieving better client and business outcomes.
Speaking to Financial Standard at the event, Burridge said he would encourage all new entrants to the industry to go sans licensee, to establish a business with CRM at its core which is integrated with their chosen financial planning software provider and finally, to focus on client engagement.
“People that seek advice don’t understand the industry, so they trust you with their finances, and you as a financial planner are perhaps dealing with people or groups that aren’t necessarily aligned with making sure that the service provided is equal to the amount of trust being afforded by the client.
“Go independent, put an integrated CRM at the core of your business and really focus on your clients. They’re the very simple denominators of an advice business that will win the game today.”
He also believes that encouraging advisers to take greater control of their businesses will not only see a significant increase in profitability and improvements in compliance but, more broadly, would encourage more female engagement, both as advisers and clients.
“I think, currently, women don’t like the product and sales nature of the industry – they like the softer side which is the goals-based investing and helping you through your life and that’s actually where all the value lies. The industry has long been trained by men who teach us to sell world’s best product, but that’s not where the value lies.
“Females are going to be the ones that own most of the money because they’re going to live longer – that’s just the reality. We will all be dealing with women as the wealth transfer happens with baby boomers.”
Originally posted Financial Standard