In a tough market it pays to stand out from the crowd and, for IFAs who are not already doing so, it may prove rewarding to sharpen their focus on the Backbone of Britain – that is, clients who own and run their own SME businesses.
While providing financial planning advice is an IFA’s bread and butter, advisers may be of even greater service by bringing to bear the insight and experience they’ve gained from running their own business to this group of customers.
In addition to having this insight, as these are existing customers, who better placed to understand many of their aspirations, ambitions and challenges?
And, while many of those who run their own business wouldn’t change it for the world, it’s rarely all plain sailing.
1) Potential pitfalls
The list of potential pitfalls is a long one. For instance, when we asked SME bosses what keeps them awake at night, one in four (26 per cent) said that they worry about the impact of work on their lives.
This survey was carried out among 507 SME senior decision-makers September 2016 by market research agency Atomik.
And one of the biggest impacts is working long hours – nearly nine out of 10 (88 per cent) of the bosses we polled said that they and members of their teams regularly work more than their scheduled hours.
While pressure can be motivating and a spur to greater success, it’s important to remember that we are after all only human and that too much pressure for too long or in the wrong place or at the wrong time can bring us down and undermine our performance and productivity.
Indeed, according to a newly published report from the Centre for Mental Health (Mental health at work: The business costs 10 years on), mental health problems in the UK workforce cost employers almost £35bn in 2016 – £10.6bn in sickness absence costs, £21.2bn in lost productivity of employees working when unwell and £3.1bn in staff turnover costs.
2) Challenges of hiring
Clients whose businesses are on the up may well be hiring, which brings its own rewards and challenges. Good people are hard to get and keep and you may therefore be able to help your clients consider their key employees’ protection needs in addition to those of their own.
For example, the bosses we surveyed said sickness absence was an issue in their business – over half (57 per cent) said they’d had to deal with absence spells of four or more weeks at some time, leaving those left behind to try to pick up the load.
Other people concerns identified by our research included losing staff (29 per cent), lack of loyalty (25 per cent) and shortage of skills (24 per cent). The first two are particularly worrying as it can be costly to replace people who leave – around £28,000, on average, in time and resources to recruit someone suitable, according to our study.