Over the course of my 30-plus years in financial services, I’ve had the privilege of working for some amazing organisations of various shapes and sizes both in Australia and overseas.

I’ve spent almost half of this period as a business owner and CEO, so I have a deep appreciation of the pressures and pleasures that come with that position. I also have a healthy respect for and awareness of the fact that a thriving profession benefits from having genuine diversity in the participants that make it up.

Single-practitioner and smaller multi-adviser firms make up a large part of our industry and they will be a key enabler for new entrants gaining experience and driving innovation to support future demand.

At the same time, the demand for financial advice continues to exceed the available supply of quality advisers. There are multiple factors influencing this dynamic, including the shifting regulatory landscape, an ageing population, increased property and superannuation values and the wave of intergenerational wealth transfer that will continue over the next 30 years.

Iress and Deloitte’s Advice in 2030: The Big Shift report discusses these factors in detail and quantifies the increase in demand for advice, suggesting that circa-500,000 new customers will enter the market before the end of the decade.

Decisions, decisions

Recent conversations with smaller practice principals have prompted me to share some thoughts and insights around the rollercoaster ride many advice firms will be on as they look to drive growth and capture some of this new client demand.

As a business owner, you have many decisions to make about what your journey is going to be. When it’s just you with no staff, it’s almost exclusively in your hands. As soon as you take on responsibility for staff, though, things get a lot more complex and you need to wear an increasing number of “hats”.

For those who take on the licensee responsibility, that’s yet another hat to wear and balance in terms of where you focus your time and efforts.

Either way, costs will start to increase and you must learn how to drive and implement efficiencies so you can balance time and fixed-cost pressures. In many cases, this means tapping into outsourcing and resource-sharing as you build out your revenue profile. Along the way, you’ll also have to develop a raft of new skills.

Some owners will make the decision to remain sole practitioners and devote their time to seeing clients. They resource up their support team and accept that there will be a capacity cap on how many people they can service.

By their nature, these single-practitioner firms contain significant key person risk. The viability of the business is heavily reliant on the sole practitioner’s ability to advise and see clients.

Other owners will make the decision to move from a sole-practitioner model to a multi-adviser one. This can be very rewarding, as you now have trusted and experienced team members who can share the load, free up capacity and diversify the risk. This puts the business in a much stronger position to grow and support a better balance between life and work.

Expect the unexpected

As I said before, though, this is a rollercoaster: over the years, I’ve spoken to many business owners who started their journey growing as a sole practitioner before hitting a capacity ceiling. Some then took on additional client-facing team members to facilitate growth, which allows the owner to adjust their mindset, think bigger and spend more time developing the business.

Things don’t always go to plan, however. And when they don’t, it can be incredibly frustrating for a business owner.

There are no guarantees when it comes to staff and retaining members of the team. It can sometimes feel like it’s one step forward and a couple backwards.

Sometimes, business owners are hit with a couple of team departures in quick succession. Immediately, the business falls back to a sole-practitioner focus as the owner needs to cover client contact and work necessary to fulfil servicing contracted responsibilities.

The business goes into survival mode; all work on business development comes to a standstill. Getting back to where you were before involves recruiting new team members, and there’s normally a three-to-six-month lag during this process – in a tight labour market, it might take even longer and cost even more.

Your "what-if" plan

In any small firm, there’s a key question to ask on a regular basis: “How will the business cope if I am not present, or if one of the practitioner team members is not present for a period of time?”

This question isn’t just about the firm; it’s also something clients need to consider. Who’s going to look after their needs if you or your team members aren’t able to service them?

Resilience to these scenarios can impact business valuation, principal mindset and satisfaction and team morale, as well as the standard of client service. So, there is a genuine risk to be managed.

My overarching advice is to focus on what you can control or influence here and not what you can’t. So what can you do?

1. Establish a financial buffer

• Know your numbers, ensure that the business is profitable and that you build up cash reserves that help you through challenging periods
• Explore the role that insurance solutions may play to offset loss income or value

2. Understand your own professional and personal priorities

• Manage your health and wellbeing so you don’t burn out
• Regularly take time out of the business so others learn how to cope
• Build a brand that is not just about your personal brand; let personal brand take a backstage

3. Hire, train and develop the right people and delegate responsibility to them

• Ensure that roles and responsibilities are clear
• Set in place processes for mentoring, cross training and work shadowing
• Be aware of your own capacity constraints

4. Document your processes and procedures

• This is critical when you are the only practitioner and even more so as you add additional practitioners
• Have common frameworks, systems and processes that all team members follow

5. Actively look for opportunities to automate and outsource activities, particularly that can reduce the number of hats that you need to wear

6. Reward your team well and understand what’s important to them

• Put in place things that encourage loyalty and longevity
• Allow them to share in the success of the business. For many, this is a combination of bonus pools and/or equity participation
• This can also be the personal growth and development that you support and/or the flexibility you provide in the workplace

7. Participate in adviser communities that provide you access to different perspectives and solutions and help offset some of the isolation

• Through communities that you are part of, i.e. licensee or service provider networks, seek out opportunities with other advice professionals who may be able to step in as a locum, or short-term contract to service clients when you’re unable to
• Consider the benefit of an external coach to minimise blind spots 

In many cases, it’s about having a blueprint (your “what-if” plan) for how the business will operate when you or a key team member is absent. It’s about having clearly-documented processes that can provide a solid foundation to support a handover.

Being prepared and having all of this mapped out will help make what can be a very stressful situation into a more manageable one.