by Ryan Goodfellow, National Growth Manager, Centrepoint Alliance
It often surprises me why financial planning firms don’t regularly review their dealer group as they would review other service providers.
It’s not uncommon for advice firms to have been with the same dealer group for many years without reviewing whether they are continuing to deliver the support the business needs.
The sweeping changes to regulation over recent years has kept many practice principals preoccupied with adapting to the new environment. But now that these changes have been settled, isn’t it time to ask, “Will my current dealer group help my business to thrive and deliver my client value proposition in the new world of advice?”
Some people in the industry believe that dealer groups are all the same. Certainly, all dealer groups provide compliance frameworks, software and technology solutions, PI cover and research and technical support.
But what are their values and guiding philosophy? Do they really believe in the value of advice? What are their own business motives?
In terms of the support they provide to your business, it really comes down to three questions.
- Does my dealer group help me make money?
- Does my dealer group help me save money?
- How does my dealer group mitigate against risk?
Of course, many advice firms don’t seriously consider the alternatives because they think it’s too hard or too costly to change or they simply don’t know where to start.
Many are concerned about the possible disruption to the business in terms of lost productivity and potential loss of clients in transferring to a new dealer group.
This can be largely mitigated by having a good transition plan in place, and support that includes a dedicated transition team and thorough training program for both the principal and staff.
In the event that a decision is made to move dealer groups, it is vital that both the transitioning advice firm and the new dealer group have a clear understanding as to the strategy and vision of the business. This will ensure things are set up the right way from day one to support your business as you grow.
Some advisers are concerned about explaining the changes to clients. If you have good client engagement, a clear value proposition and good reasons for changing dealer groups, this shouldn’t be a problem.
At the end of the day, it’s your business and your client relationships, so you need to make sure your dealer group is supporting you and your clients every step of the way.
Once you decide to review your dealer group, it’s important to establish clear selection criteria and processes. The process needs to cover specific functional capabilities, technology and attitude to advice and investment, as well as alignment with your values and business model.
Of course, to do this properly, you need to first have a good hard look at your own business and where it is going. Irrespective of whether you end up moving dealer groups, most advice principals and staff find this a rewarding experience and often a catalyst for positive changes in their business or their relationship with their current dealer group.
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