
Image: Katie Brinsden is Managing Director of Truly Independent
The question of whether skills can be transferred from one business sphere to another has been debated for decades. It is possible to make a reasonable case for both sides of the argument.
On the one hand, there are countless talents that clearly do not lend themselves to a variety of arenas. The fact that you are a tech genius, for example, does not make you a wonderful landscape gardener – and vice versa.
On the other hand, attributes such as swift decision-making, adaptability and flexibility may work in any setting. This could be why some top CEOs appear capable of making a mark here, there and everywhere.
When I entered the world of financial advice, having previously worked in the motor trade, I essentially started from scratch. But over time I found a few elements of my prior experience stood me in good stead.
On the whole, then, I think I appreciate both sides of the coin. Even so, I am invariably alarmed by how many financial advisers seem utterly convinced of their ability to run a business.
Remarkably, this view also prevails outside our industry. Along with a handful of other professional groups – solicitors and accountants perhaps foremost among them – advisers are regularly perceived as inherently equipped to develop and head up a company.
I find this assumption not just bizarre but potentially dangerous. In my opinion, the relationship between the skills necessary to ensure other people’s financial security and the skills necessary to build and manage a sizeable organisation is at best tenuous and at worst non-existent.
So why do so many advisers think their brightest future lies in having their own firm? Why do they believe themselves innately ready to direct, train, monitor and motivate others? Why are they so willing to shoulder all the accompanying responsibilities? It is an enduring puzzle.
The journey usually commences with an adviser setting up a directly authorised business. Sometimes this is done in partnership with another adviser – itself a mistake if the interested parties’ respective competencies and visions turn out to be mismatched.
It would be extraordinary to settle for similarly shaky foundations in the motor trade. For instance, a car salesperson would likely go into business with a mechanic – not with another car salesperson. Would it not be more sensible for an adviser to partner with, say, a compliance expert?
The longer-term strategy is likely to encompass a policy of ongoing recruitment. This means a key objective is to create a multi-adviser company. Ambition should not be criticised, of course, but what is routinely overlooked is that expansion normally translates into complications.
As many of us know only too well, a directly authorised business must devote a great deal of time to administrative duties. Regulatory requirements constitute a major part of this burden. The commitment becomes increasingly onerous as the number of advisers rises.
Consider the daunting quantity of background work nowadays needed merely to satisfy the whims of compliance. Crank that up by a factor of 10 or 20 – if not much more – and you may get an idea of what it takes simply for a multi-adviser firm to survive.
Such a level of pressure goes a long way towards explaining why a proprietor is rarely able to advise clients and be an effective leader. Even drafting in extra admin staff might only exacerbate the problem by placing an additional strain on efficiencies.
This presents advisers with what appears to be a genuine dilemma. Their first option is to carry on delivering advice, while their second is to fully embrace all the difficulties the day-to-day running of a company entails.
Sadly, many advisers regard the former course of action as inconsistent with their preconceptions of success. Yet the latter may be every bit as unappealing, given that they are likely to lack the requisite skillset.
This choice between equally unattractive alternatives can bring enormous stress and an intolerable workload. It represents one of the biggest barriers to the happiness of members of the adviser community.
Fortunately, there is another way. By partnering with a firm that is already strong on the non-client-facing side, advisers can spend as many hours as they wish doing what they excel at – that is, giving clients the sort of service they expect – while benefiting from an array of resources expressly designed to help with the “heavy lifting” of advice provision.
Truly Independent’s notion of a successful, happy adviser can be summed up as one who is directly authorised without the burden, independent without the research demands and supported without the costs. Crucially, we also believe it is one who recognises opportunity must always be balanced against risk.
There is certainly opportunity in growth. Yet there can also be a significant degree of risk – not least for advisers who, quite irrespective of their skills, can ill afford to add even more complexity and anxiety to their working lives.