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Building an advice business for the future

Building an advice business for the future

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By Eamonn Twomey ·
October 28 2015

Building an advice business for the future

When starting out, many financial advisers' dream is to build a successful business that they can one day pass on to a successor or sell for a big sum of money to secure themselves in retirement.

For a smaller number, they simply want to operate as a lifestyle business, generating enough cash to live comfortably in the present. They don't want to run a business; instead they are happy to stay operating as a financial practice.

They are operating more like traditional insurance salesmen, living from year to year, with no great growth ambitions. There is nothing wrong with this as an approach, if you have decided that this is what you want.

However, there are quite a number of advisers in the market who very much want the former situation (to build a business), but in reality are they still operating like the latter.

So what is it that stops them from successfully transitioning into being a business?

No strategy or plans in place

One of the characteristics of advisers who are living from year to year with little clarity of where they are going in the future is a lack of a strategy and firm plans - ones that are written down.


These advisers may be operating very successfully today, but are not really focused on the future and what they are actually trying to achieve. Good strategy and plans take reflection, challenge and commitment. Without these inputs, it's hard to clarify and chart your future direction.

Propositions tend to stay the same

It may be the consistency of your approach that your clients love in dealing with you - knowing what to expect, being happy with the service given.

However, times do change, markets and ways of working evolve, there are areas of improvement always available to you.

First of all, you need to be able to clearly articulate your proposition. And then you need to review it on an ongoing basis, tweaking it and making improvements as opportunities emerge. If you don't seek these out, competitors that are on a hungry growth path will develop more future-proofed propositions and will inevitably overtake you.

This will leave you operating as you've always done, maybe generating sufficient income to meet your needs today, but remaining pretty static in terms of building a business.

It's all about you

Successful practitioners tend to be running at 100 miles an hour, usually six days a week! Earning a lot of money but knowing that without their input, there really is no business. This can leave them highly stressed, prevent them taking holidays and often leaves them quite dispirited. If they get sick, everything pretty much grinds to a halt.

A business on the other hand has the principal pulling the strings.

Everyone else (hopefully) is very busy - seeing clients, managing the processes, dealing with client queries. The principal is still active, but it is in more of a strategic role - setting direction, finding new clients, advising high-value clients only. In this scenario if the principal gets sick, it's not game over. The business is robust enough to continue.

Another attribute that I see in businesses that have evolved is in the quality of the people brought into the business. They tend to be of very high quality, really lifting the whole game of the business. And then there is a real commitment to invest in these people, keeping them at the frontier of best practices in the industry.

Of course, if you ever want to sell your business, for it to be attractive to a potential buyer, the higher the quality of the people around you, the better.

Poor financial management

Another attribute of practices as opposed to businesses tends to be in the area of financial management. The former tend to have low/no reserves, regular cash flow challenges and poor financial management practices in place.

Successful businesses on the other hand tend to excel in all of these areas. Earnings are at a level that the business can comfortably afford, there are strong reserves in place and constant visibility of all of the important financial metrics. All of these help in building a sustainable and eventually valuable business.

Where are you today? Are you running a lifestyle practice or a business? And more importantly, where do you want to be in the future?


 Eamonn Twomey is the principal of marketing and strategy business StepChange.

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