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Adviser toolkit: Adapting to survive

Over the past 12 months we have been looking at the various components of building a successful independent financial planning advice practice.

We have used the outlines of a conventional business plan to address the primary topics that the business owner should think about before taking that final step.

“Test fast. Fail fast. Adjust fast.”

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A recent radio discussion considered why the British were generally not so good at business start-ups. The conclusion was that in many cases, business owners keep trying when something isn’t working. Other nations were considerably more open to the idea of just stopping, thinking and starting again.

We have discussed fee-charging structures, service levels, meeting structures, investment propositions, back-office administration systems, client advice processes, professional connections, marketing methods and so on. In all of these areas it is important to distinguish between those things which are fundamental to how you run your business and those that cannot be changed without changing the essence of how (and why) you want to work with your clients in the way you have been planning.

But there are many other areas where your decisions may not be so business-critical, where change is certainly possible, and may even be desirable. The advice from Tom Peters, the American management expert, is invaluable: if we persist for too long in trying to make something work then by the time we finally realise that it actually isn’t going to work it may be so ingrained in our business systems and processes that change is even harder.

Change is expensive, which is why all this forward planning is never a waste of time. On the other hand, persisting with something which simply isn’t working may prove considerably more expensive in the long run.

“Test fast” means getting things going quickly, keeping a balance between rash implementation and planning to the nth degree. “Fail fast” implies that you will keep all aspects of your business under constant review and work out very quickly that something isn’t working, instead of waiting to discuss it at your firm’s next annual away-day. “Adjust fast” suggests that having established what isn’t working, you try something new – which in turn you will test fast, decide whether it fails or not, and adjust fast if necessary.

This cycle of implementation, review and revision is, in Peters’ mind, a rapid cycle. It should involve all members of your staff, and if you work alone then consider using a business colleague or a mentor as a sounding board to your thoughts on these questions. It suggests to me at least that the business owner who takes this seriously holds a much more strategic oversight of the company.

However, while this type of oversight is not something to be left to your office manager, a good paraplanner and administrator will free up the business owner’s time to engage in the kind of strategic assessments, planning and development that are necessary to the continued growth, development and success of the business. This potentially means getting a little less involved in the day-to-day business of advising clients, but with planning, time management and clear job descriptions and roles, everyone should be able to work together to make your firm the best that it can be.