Advice businesses based in Australia that are enjoying more success exhibit certain critical characteristics, according to a new report by VBP-backed Elixir Consulting.
The inaugural 2024 Advice Operations Research Report, sponsored by Colonial First State, found top-performing businesses have six things in common:
- A healthy culture
- Dedicated practice manager
- Documented processes
- They outsource tasks
- Use managed discretionary accounts
- Engage an external business coach
A statement from Elixir says the report also found a direct correlation between pay and performance, with businesses that reward all employees by paying bonuses and competitive salaries recording an average EBIT margin of 27%.
By comparison, the average advice business has an EBIT margin of 23% after normalising Principal salaries to $150k + super. They also recorded higher employee satisfaction and culture scores.
The report’s author Lana Clark, Founder of GSD Lab and Senior Consultant at Elixir, says the research highlights the positive impact optimising operations can have on profitability, employee satisfaction and culture.
“So many discussions about business growth and profitability are focused on recruitment, scale and M&A, but another important lever is optimising operations,” she says. “Advisers can enhance client service, build a strong culture and mitigate risk by driving operational improvements.”
Elixir Consulting surveyed 171 advice businesses across Australia, representing 561 financial advisers, 43 risk specialists, 72 accountants and 25 mortgage brokers, as part of its research.
Sue Viskovic, Founder of Elixir and Head of Consulting at VBP, says the report reinforces the importance of the right technology for streamlining back-office operations, citing that 68% of respondents did not have effective systems for managing workflow.
Click here for a copy of the report.