Navigating common challenges in advice businesses

Running a business can be very rewarding but it’s not without its challenges. And in an industry where we are faced with ongoing change that could disrupt our business, it’s important to focus time and resources to minimize disruption as much as possible.

While there are many things that can be implemented, this article will focus just on people and process. 

People

The success of a business depends on many things, one of which is people. It’s not just having people, but having the right people, doing the right things. Think about the following tips when faced with challenges relating to people within your business:

1. Have the right people – do you have the right people within the business with the experience, skills, and knowledge to perform their role? If not, consider investing time and money in upskilling them, or, if feasible, consider employing someone with the right skillset. Outsourcing some functions is also an option, even as a short-term solution whilst you spend time upskilling.
   
   Also consider which of your staff are involved in which part of the process, for example, are those who are less experienced, or on a lower salary involved in the part of the process that is most effective from a cost point of view?
   
   
2. Invest in your people – people may start off doing a particular role but as they become better at what they do, they begin to feel unmotivated and restless, eventually they will look elsewhere for something more challenging. Help them get where they want to be professionally, by encouraging development.
   
   This can be via education, training or mentoring for example. You may even consider running “strategy lunches” to have the time to explain the “why” in relation to certain client strategies, thereby upskilling and involving everyone in your business. You could even take some of your support staff to PD days or conferences to upskill them and get more involved in industry events.
   
   According to Macquarie Bank’s 2023 Benchmarking Report, “[a] well-organised firm with stronger employee value propositions can attract talented people. Additionally, staff who feel empowered and rewarded offer greater discretionary effort, which translates into better client experiences, and frequently, better business outcomes.”
   
   The report adds: “Studies show that employees who are highly engaged deliver more valued services and experiences to clients, and those clients become highly engaged and more loyal.”
   
   
3. Empower staff – staff are always the most engaged when they are given the tools to do their job, but then management steps back and allows them to “own” their role without micromanaging.
   
   Part of this is acknowledging that mistakes happen, so encourage staff to own their mistakes. Use this as a learning exercise and if it happens frequently and across numerous staff members maybe it’s time to review a certain process being followed. 
   
   For example, if something was implemented incorrectly, or a difficult call wasn’t handled in the right manner, provide a safe environment for staff to put their hand up, which can lead to coaching and training.
   
   
4. Encourage innovation – being open, honest and transparent creates the right behaviors. Encourage staff to challenge the status quo, rather than accepting that “this is how it’s always done”. Reward and acknowledge innovation – it doesn’t always have to be a massive change, and sometimes the smallest changes result in the biggest impact.
   
   An example we have come across is a client who was redacting TFNs by printing the document, covering the TFN with a post-it, scanning the document then shredding the hard copy. By incorporating Adobe software with a redact functionality at a small cost of $40 per month, this resulted in saving many hours of manual work resulting in efficiency and cost savings.
   
   
5. Reduce key person risk – do you depend on particular people to undertake certain tasks? What happens if they go on extended leave, or they suddenly become ill and are away for an extended period? Can someone else within the business step in and help? Set up your people in such a way that someone can step in and take over from someone else at any given time.

Your people are your business, and they matter. Ensure everyone has clarity of their role and the functions they perform and the capability to perform those functions.

Process

When reviewing or building your process always do so with a client experience lens and ensure your processes drive action and outcomes. Think about the following tips when faced with challenges relating to processes within your business.

1. Map your process – process maps allow decrease key person risk and allow for automation, efficiency, and consistency. In developing process maps ensure they capture who is responsible for what and that you have supporting documents such as operating procedures.
   
   You can also overlay controls/compliance obligations (e.g. advice pre-vet). Mapping your process also highlights where any duplications are occurring, or steps in the process that aren’t adding any value.
   
   
2. Set yourself up for change – if a business is profitable and running smoothly, it's easy to forget to stop and think about your process and areas for improvement. But if something changes suddenly, or something unforeseen happens, e.g., a long term knowledgeable/experienced staff member leaves, the business may find itself in a bind.
   
   
3. Setting up processes for long term growth – don’t get into the habit of creating processes that you set and forget. Evolve the process as the business evolves. Take ownership and make sure your processes are fit for purpose.
   
   In setting up processes, make sure the right people are involved along the way based on their role and their knowledge and experience and automate your processes where possible. According to the Iress Financial Advice Efficiency Survey 2023, practices with a fully-automated review process took 2.1 hours to prepare a review compared to practices with no automation, which took 5.5 hours.
   
   Where you are creating a new process, think about whether it makes some of your existing processes redundant. Don’t just bolt the changes onto existing processes.
   
   
4. Build in compliance – for many businesses, compliance is an after-thought and there is no alignment of processes and compliance obligations. When things are good – they’re good, but when things go bad, it can get ugly!
   
   Don’t get into the trap of thinking “it won’t happen to me”. Ensure your processes are built with compliance within the process, not as an afterthought. Ask yourself, if something unexpected happens, do you have a plan in place to follow when stress is high, and you don’t have time or mental space to plan what to do?

Whatever stage your business is at, our experience has shown us that people and process are critical for your success. If you invest in both, it will ultimately make your business stronger. As always external help is available if you ever need it.