Essex branch met in November, welcoming Paul Bayliss and Andrew Surrey of Pershing Adviser Solutions, reports branch chairman Adrian Quick CFP^CM.
Although entitled 'The Five Big Things Advisers Should Think About', the depth of content and interaction from the Essex members and guests did not progress beyond the third 'big thing'. Paul and Andrew offered a timely reminder of business considerations that can have big impacts to our businesses.
Independent researchers (Moss Adams LLP) confirmed that expenses of the average adviser firm are trending up beyond the optimum, squeezing margins. Developing strategies that can grow revenue faster than expenses plus a focus on relevant and accurate management information (MI) (including financials) can create opportunities for positive change.
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Across the spectrum of successful businesses the top five features are:

• Clear positioning of the Value Proposition: We are all familiar with Pareto's 80/20 Principle, but if we understand the best fit between the clients we seek to attract and our service proposition, why would we continue to accept 80 per cent of our clients as sub-optimal?
• Structured to deliver the Vision; which implies you have one Human Capital Plan; developing and engaging staff
• Managed to Profitability; have, understand and respond to the numbers
• Elicit regular feedback from trusted third parties (external oversight)

All of these elements should ideally be part of all of our business plans, led by our personal definition of business and personal success.
In determining how to optimise revenue Paul and Andrew structured our service for Pricing, Product (Service) Mix, Client Mix (the right type and profile) and Productivity. Are we orientated to compete on Cost or Value? Sensible observations were made about Compensation and Operating Profit where circa 25 per cent was seen as the ideal net of directors/partners management salary. However, many businesses fail to achieve even 15 per cent.
This was an excellent presentation and discussion which helped us think about our businesses, not just the client journey.

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