More than 47 per cent of Australian advice firms are in bad health due to poor organisation when it comes to the structure of their business, independent advisory firm Business Health has said.
“Our research shows that only 57 per cent of firms have a fully documented business plan and that only 46 per cent have a recently reviewed succession plan,” Business Health partner Terry Bell said.
“At the same time just 45 per cent have a disaster recovery plan in place, with only 58 per cent of firms seeking external input from a professional.”
Bell said interestingly despite pending legislative changes, figures had effectively gone backwards in comparison to two years prior.
“The fact that advisory firms are ill prepared for the future is not good news,” he says.
“No doubt principals have been busy but by spending too much time working in the practice rather than on it they are eroding the value of their businesses.
“Considering current reforms, new regulation, increasing demand from clients and a whole host of other changes affecting the industry right now, this is dangerous territory.”
For businesses that were planning appropriately, Bell said they were earning on average a profit 165 per cent higher than those that were not.
“Every successful person has to take timeout to think about where they’re going and how they’re going to get there,” he says.
“Dealer groups should be the first point of call for advisory firms as they are receiving fees to provide such services. For those self licensed groups, they are more exposed at the moment so I would encourage them to seek input from external providers.”
“I think MLC’s offer of fee-for-service workshops to both internal and external firms has been a great move by one of the big providers.”
