With some financial planning practices feeling the strain of the current credit crisis, principles looking to grow their business should consider alternative measures for acquiring clients, according to licensed business broker Centurion Market Makers (Centurion).
“If the product sales of the industry’s leading platform providers is any guide, new client acquisition by financial planning practices would be down at least 40 to 60 per cent on last year,” Centurion founder Chris Wrightson said.
“With this in mind, one of the greatest challenges financial planning practices face is client acquisition, specifically acquiring clients that fit the business’ advice offer and profile.”
Many practices are looking to sell their lower value clients, or clients who do not fit the future advice and business offer, in an attempt to improve efficiency and position their business for growth, Wrightson said.
According to Centurion co-founder Wayne Marsh, there is a real opportunity to acquire these so-called “C and D” client books.
“For those who find acquiring the books of financial planning clients still not affordable, they should consider the books of other financial services businesses,” Marsh said.
“The mortgage broking market is undergoing significant change and rationalisation, and books can be up to 30 to 40 per cent cheaper than those of financial planners.”
Developing relationships with accountants was traditionally a key source of new clients, but the opportunity to do this diminished significantly after accountants gained licences to offer financial planning or established referral or joint venture relationships, Marsh said.
“If there is a key lesson for aspiring Generation X planners out of the current climate, it is to build a risk book as priority – its revenue stream is largely immune to the vagaries of investment markets or economic climates,” he said.
