Take stock in the new year, think about what you need to achieve, and plan it out, writes Melissa Downes.
January is a good time to reassess. If you’ve had some time out you can view your business with a clearer perspective after mulling over issues from last year that you never had time to solve or address without interruption.
You may have decided you don’t need to do things the same way, or that troublesome part of the business that is costing you more than it is worth can go.
Shannah Kennedy, Life Strategist at The Essentialists Hub, explains why the new year is the perfect time to do longer term planning.
“As humans we think linear and we block everything. Everyone has the road map to Christmas of what we need to tick off. The January mindset is about power planning. What do you want this year to represent? How do you want your business to grow?”
And Financial Planning Association chief executive officer Dante De Gori agrees that the new year is always a good time to take stock. Adding that “clients [also assessing a new year] are looking for a steady hand to guide them with their finances”.
Take the opportunity
Consider what you really want to achieve for the year. As the old saying goes ‘those that fail to plan, plan to fail’. If you can effectively map your goals (Tony Robbins has a useful template) and give them a deadline, you are much more likely to achieve. Deadlines hold you accountable. While your diary is relatively clear, punch in the deadlines and allocate the time and resources you need to achieve your set goals.
Kennedy has done this for 25 years.
“I set aside a day or two and I go through my diary for the entire year. I book in all planning days, writing days, self-care days and holidays so I feel supported with a great foundation. The first of every single month is a finance day for me so I set and connect with my finances.”
Paul Cullen, an adviser with many decades of experience at Centrepoint Alliance explains how he harnesses this time.
“I’m clearing the decks of things that should have been done and weren’t but need to be so they don’t frustrate me. Then I am assessing where I am at with the goals I set last year. Hopefully most of them are done. Some will still need to be done and carry forward so they become part of my goals for this year. Some are no longer relevant so I will take them off.”
With this in mind, review your business: is it prepared and fit for purpose? Do this by looking at strengths and weaknesses of the organisation. For example, “if trailing commissions are likely to be turned off, what’s your strategy for reducing that reliance if the business is reliant on them? Then you can build this into your strategy,” advises Cullen.
There's two particular considerations for 2019, that are likely to have some impact on your business.
- The royal commission into the banking and advice industry scrutinised practices and products. The recommendations, due February 1, will have broad implications across the industry and could even reshape it, depending on how the government responds. This is worth considering when planning for this year.
- New education and training standards came into effect at the beginning of this year. This is forcing many financial planners to consider their qualifications and commitment to the higher standards being demanded for the future of the profession.
Shore up your strengths
Kennedy, who works with advisers and executives is telling her clients to consider systems and structures too, so they can handle growth. But she agrees with Cullen: “Given the shifting landscape, it is worth making sure that you are really up to date, do you need to upskill in any way?”
Taking a look at what is making money and what is really valued by the client is critical. She says advisers can be much more profitable with their existing revenue stream by reassessing inefficiencies. "We see practices where if they make one change, there’s an additional $100,000 in profit staring you in the face,” says Cullen.
Plan to win
All goals need to be clear, measureable, and achievable. “If you replace all your trialing commissions you need to set feasible goals to replace that revenue. Have a plan and action for each of them. How often will you review it?” advises Cullen.
Kennedy suggests thinking three years ahead of now.
“I always get my clients to write down their age in three years’ time. What do you want to be doing at that age and how do they want to be feeling? What could you be doing today to get to that picture in three year’s time? Most people don’t take the time to sit down and do the structure but unless you lock it in, it just doesn’t happen.”
“There’s a reality that needs to set in. Once that moment has arrived you have to act. You get on with it. Some items are relatively easy to pluck off,” states Cullen. “Traditional models around licences are going to change, that’s a reality and we’ve responded to it with strategic thinking, planning and goals. People that have thought about service propositions have moved to fee-for-service through critical assessment,” he adds.
Cullen concludes that profitability can be grown by turning attention to basics. “The best advisers will continue to grow their business doing the things they have always done.”
“If they are passionate about what they do and committed to providing a high level of service, clients are very happy. Continue to focus on that and clients will continue to refer people to them.”
- If you haven’t already, take time to set your business goals for 2019.
- Map out a path to achieving your goals and give them a deadline. Put them in your calendar.
- Allocate time in your dairy now for holidays, personal finance, self-care and industry events so you can prepare.
- Consider the impact of the new education standards and royal commission recommendations.
- Look hard at the business for any inefficiencies you can start to change right away.
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