The end of the legacy trail, poor data management and the lack of a business plan determining the cost of giving advice are some of the issues worrying national advisory firms, analysis has found.
The study, carried out by Engage Insight among 75 firms together with Clients First and Standards International, looked at the key causes of optimism and concern for advisers in the post-RDR world.
It found that one in five firms did not have a business plan determining the cost of giving advice, and one in four was not confident in the quality of its data management.
Beyond this, 48 per cent of those questioned did not have a documented marketing plan and 74 per cent had no benchmarks for operational procedures or systems.
Chris Davies, managing director of Engage Insight, said: “Although there are good signs that adviser firms are making progress, there seems to be a common mistake in confusing business and strategic planning, which can mean real risks for models going forward.”
The research also revealed adviser uncertainty around the effects of the end of the legacy trail in April 2016 and a reduced belief that client segmentation was matching client needs.
A note about the research also found that personality could have both positive and negative effects for an adviser firm and its operations.
It said: “A cult of personality still exists, where strong adviser-client relationships are evident.
“Business owner biases bring risks such as a conflict between confidence that client revenues will cover the business model costs, and uncertainty around the profitability of the model.”
Jon Pittham, managing director of marketing agency ClientsFirst, said: “Self-marketing is evidently on the increase, though some areas are experimental.
“Firms can leverage opportunities and increase their value through better marketing planning and budget assignment.”
The research also found high confidence that administrative support was providing “comprehensive business management”.
One in five firms does not have a business plan that determines the costs of delivering advice
Adviser view
Clayton Cumming, partner at Glasgow-based Advice and Wealth Management Solutions, said: “Obviously RDR has come in, but in this day and age, keeping up with marketing, technology and things like legislative changes is part of running a business. Otherwise you get left behind.”
