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We recently published a research report titled “A Measure of Success. Business management best practice for advisory firms” .
Since the Retail Distribution Review was launched in 2006, we have seen much written about business models and how firms have been challenged by regulatory change. Looking around the market we can see that while change for many was not easy, there are plenty of examples of best practice in evidence demonstrating that a higher degree of professionalism now exists.
The findings show that firms operating with a clear direction and appetite for proactive and on going change are in a strong position. They have created cultures defined by carefully considered values and beliefs, where everyone in the business understands and adheres to these. Employees in these firms know they have to do the right thing for the firm, and have clarity on who and what they are. Above all, they operate with an almost obsessive attention to detail and a focus on continuous improvement. The report contains plenty of practical examples that we hope advisors will find helpful. The most debated point so far, has been the prediction by a number of firms that there will be a move away from charging clients on a percentage of assets towards fixed fees and value pricing based on complexity of needs, not wealth.
While plenty of examples of best practice can be found in the industry press, our aim was to bring these examples together into a single source to understand what best practice looked like across key business disciplines, and how these interrelate. Our sample consisted of firms considered by industry commentators to be leaders. The research probably didn’t tell us anything radically new but it did demonstrate that some firms have successfully embraced and implemented a set of behaviours that have allowed them to create entities that continually change and strive for better outcomes for clients, and employees. As one managing director said to me last week – we all know that we should exercise four times a week and eat five portions of fruit a day, but how many of us actually do it? Point being made is that it’s all about the ability to execute.
For firms that are interested, we will be offering a workshop in the New Year to help firms establish where they stand against the best practice findings from the report. Within the report we have also provided examples of ‘competent’ and ‘struggling’ (as defined by NMG), along with a benchmark checklist should business owners and management teams wish to review the findings on your own. The report contains much detail but we hope you will find it to be an engaging read that offers ideas that can be applied within your own firm.