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I’m going to call this straight up. This is going to be direct and in your face.
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Unless Advisers actually value themselves enough to make sure they are being paid what they are ACTUALLY worth, the Advice Professions will never take what I believe is their true place in society.
[/vc_column_text][vc_column_text]Chances are if you are reading this, then your business is NOT a true business (in profit terms) and you are not actually being paid what you are worth.[/vc_column_text][vc_column_text]I’m going to tell you how ridiculous this is; that I have met and reviewed in detail more than 500 small to large size firms across the Financial Advice & Accounting space.[/vc_column_text][vc_row_inner][vc_column_inner width=”2/3″][vc_column_text]
Yet less than 2% of those firms are actually making a real profit above an adjusted return for the owners true personal exertion.
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The simple FACT as I see it, is that Advisers are crap at:
- Articulating their true value
- Knowing what that value actually is
- Understanding how much they should charge
- Knowing what clients will actually pay
- Expanding Advice conversations beyond their indoctrinated ‘box’
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THIS IS A BUSINESS MODEL ISSUE
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The problem with Advice is not a legislative one, The Royal Commission didn’t make life hard for Financial Advisers, it has showcased how poor their business models are.
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Accountants don’t need more ‘ideal clients’ to achieve real profitability, they need to change their way of thinking and delivering value.
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You probably don’t need a single new client to triple your profit.
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This is not intended as criticism! I am dedicated to #Advice and I feel I have been too complacent in not raising my voice loud enough on this issue.
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Let me tell you about just 3 of the conversations I have had with firm owners in the last week.
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1) An Accounting firm – $1.4 Mil in fees. After adjusting for true owners salary there is an EBIT of ZERO! Estimate of 18 months to increase their fees to $1.95 Mil without any further overheads. In fact, I expect they will reduce the cost to serve.
2) Met with a Fin Planning firm, $900k of Revenue with normalised EBIT of ZERO! A serious case of under-pricing and over delivering. Estimate of 18 months to take that to $1.8 million in revenue and from zero EBIT to $800k of EBIT. (Only increase in expense will be paying current team members more).
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Current owner is working 7 days a week! Not for long… I can tell you that! We have to put him back with his family even if we have to handcuff him to his kids.
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3) Investment Management & Structuring Firm with $3.5 million in revenue and only $500k of EBIT. These guys have great margins but only in certain parts of the business, introducing ‘Minimum Cost To Serve’ and expanding the scope of their Advice can add at least $1 million in revenue for overall less clients within 18 months.
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