Business Owner Wealth Services
Personal financial planning has been in demand for a number of years. A number of firms have done a great job at creating personal wealth management divisions that serve their clients extremely well and extremely profitably. Yet Business Owners have been greatly under serviced. Financial planning is on the verge of an extraordinary growth and many financial planning firms are not well positioned to capitalize on the opportunities, let alone capitalize on growth in the Business Market.
Research suggests that in 2006, many Financial Advisers were very interested in the Business Market.
Nevertheless research conducted by Brandmatters on behalf of ili revealed that there is very little training and attention given to Business Owners financial planning needs and circumstances by financial institutions, Australian Financial Service (AFS) Licensees and Financial Advisors. Furthermore there are few tools and resources available to help AFS Licensees and Financial Advisors meet the Business Market.
After experiencing an illness and going through the journey of selling my financial planning practice (I might add for a good sum), I looked around the market to find a service to help advisers work and service the Business Market. My journey led me to Andrew Pavuk and ili. I liked what I saw, and low and behold bought into ili.
Let’s start by looking at some numbers. As at June 2009 there are over 3 million Business Owners in Australia[1].
What follows is a number of ideas of how to get involved in Business Owner Wealth Services.
1. Segment your Client Base – One Size Does Not Fit All
Get very focused on those clients within your client base who have or are likely to have a future need for Business Owner Wealth services. This is not the same as rating each client A,B,C,D (although that is a useful exercise as well).
The purpose of segmentation is to target market messages and focus on the needs of each grouping. Here is an example of how you might go ahead segmenting your Business clients:
- Principal Dependant Business Owners – in a defined specialist segment e.g. Pharmacists in a defined region – rural New South Wales
Our recommended approach is to define the main focus groups. For e.g. Principal Dependant Business Owner and then produce sub-groupings such as specialist professions – pharmacy and then geographic location rural New South Wales within each group as appropriate.
Once you have segmented your clients, you are able to keep very focused on the key segments and target your marketing and processes accordingly to that particular client market group, their particular service providers and their industry association. This will enable you to focus on the particular circumstances of your chosen Business market segment.
2. Understand your Business Clients Particular Circumstances
Under sec 945A of the Corporations Act a Financial Adviser is obligated to discover the particular needs and circumstances of their clients needs and objectives, analyse their particular circumstances and provide appropriate financial solutions to the client’s particular circumstances.
As a suggestion in order to meet the obligations under sec 945A of the Corporations Act Advisers need to review the following issues with Business Clients
- Description of the Business
- Nature of the Business
- The particular market of the Business
- Income and Capital needs of the Business Owner
- Legal framework of the Business
- Risks – both internal and external of the Business
- Business Life Cycle; and
- Business Financial Requirements.
These requirements are over and above the requirements to meet the particular circumstances of a personal client’s needs and objectives.
Yet to my knowledge there are few AFS Licensees with the proper platform to meet the Business Advice Framework. Furthermore there has been very little training and resources to meet the particular circumstances of the Business Market until now. This is an area that ili has particular expertise through experienced practical practitioners and strong support skills.
3. Select your Offering
Work with your clients to develop a clear understanding of what you must offer to address their needs and circumstances. Then, work with other advisors to package your service offer that fit your advice framework. A package of services is inherently more valuable than an array of individual services because it can provide a comprehensive solution to clients’ needs. You can play a major role in “project managing the delivery of the services”. As you work through this process, however, remember that your product or service “offer” should be unique and meet the needs and desires of your Business client segments.
4. Establish a network of advisors
To offer a concierge approach to Business wealth management services, consider the whole range of opportunities that may present themselves. Here are some examples:
- Retirement planning
- Self managed superannuation planning
- Corporate superannuation planning
- Property investment planning
- Business investment planning
- Shares and investment planning
- Risk management planning (both personal and business)
- Estate planning
- Succession planning
- Asset protection planning
- Banking services
- Venture capital
You cannot be an expert in all of the above, but as the trusted advisor, you can play a major role in project managing the “delivery of process”. To do that, you need a network of advisors around you with the relevant expertise. Start to form relationships with bankers, solicitors, accountants and to build your network.
5. Invest in Knowledge, Tools and Resources tailored to your Business Market Segment
Using defined systems, resources and processes with a proven track record increases your efficiency in delivering Business owner wealth services and also increases your clients’ confidence in your ability to deliver those services. If you are searching for an AFS Licensee, ask them about their advice platform and whether it is tailored to particular markets and clients and if they have tools and solutions to service a particular market. Ask for specific examples of how other advisers have benefited from using their Business solutions and why they are better than their solutions. Furthermore check their Business support systems.
6. Bring your advisors in house (i.e. self contained model)
If you are serious about delivering Business Owner wealth services, consider the self contained model of bringing your advisor network in-house. This can help with positioning, response times, running seminars and showing your clients that this is a major focus for you. When you move to the self contained model, it is clear to everyone, internally and externally, that you are truly in the Business Owner wealth management business.
7. Charge Appropriately
Once you understand your service offer, have structured your practice accordingly, have the right staff and network in place, charge appropriately for your service in what I term “Fee For Process”. Fee For Process should carefully be introduced, explained and agreed with the client (dare I say use disclosure and compliance documents) with correct easy to use Financial Service Guides referencing services and not product solutions.
To conclude, there are many Business Owners out there who need help with their financial affairs. I will wrap up again with a formal statistic introduced before hand. There are 3 million Business Owners in Australia. Why aren’t you their financial adviser?
