The first group to complete the Russell Investments Practice Management Program has achieved five times the average funds under management, a year after it began implementing changes.
The practice, which cannot be named, commenced the program at its launch in July last year.
"Looking at their numbers, coming up to June this year, they're about five times the average funds under management compared to other advisers that Russell has relationships with and 10 times the average in terms of assets under management," Russell Investments head of advice capability John Nolan told InvestorDaily.
The practice achieved its growth by assessing its lower-value clients and how they were currently being serviced, Nolan said.
"The elephant in the room for a lot of advisers is that everybody says they segment their clients but then they go ahead and treat them exactly the same anyway," he said.
"It's hard for advisers to realise that their better clients were subsidising the cost of delivering service to their smaller clients."
Nolan said the group and the other participating practices in the program have been having tough conversations and suggesting to some clients that they might need to go elsewhere for advice.
Otherwise, they were having conversations around new pricing in order to remain valuable to the business.
Most of the participating groups had their own internal practice development programs but needed to have the licensees' messages supported by external organisations, Nolan said.
"The biggest challenge is that advisers try to be all things to all people and they find it very difficult to look someone in the eye and say they aren't suited to solve their problems," he said.
"Before they know it, 20 to 30 per cent of their client base is unprofitable but now they feel obliged to deal with them."
He said advisers must address the issue otherwise they will not have room to grow.
The practices involved in the program are all non-aligned, ranging from anywhere between 1 to 300 advisers and are self-licensed or have broken away from the larger dealer groups.
