A la carte Licensees

A la carte menus are popular for one key reason: the choice and flexibility that they offer to diners.

While set menus take the hassle out of choosing, and are often a cost effective option for those who intend to sample every course, there are many diners who don’t want an entrée, a main and dessert.

Financial advisers are no different. While a start-up business might be looking for a hassle-free full service offer, many advisers want the flexibility to pick and choose from a menu – particularly those whose businesses are well established.

The evolving advice landscape is prompting planners to focus on value both at a client and a practice level, and many are seeking an a la carte approach to their licensee offer.

There are some licensees already offering such a service. Sydney-based Morrison Carr, for example, allows advisers to pick and choose which dealer services they want, as does Paragem through its range of dealer services for advisers running their own AFSL.

The ability for a planner to articulate value to their clients has always been the pinnacle of good practice, but the shift to fee-for-service has put this front and centre.

Ultimately, clients are not paying for products and returns, but for advice and expertise – and advisers must be able to sell their value.

But the onus is not just on planners to articulate value. Licensees, too, must adapt their proposition to position themselves in the new financial advice environment.

The new ‘service menu’ approach, where planners are offered a shopping list from which to choose, appears to be gaining traction among financial advisers as it allows them to pay for only those services they actually use.

So-called independence is also paramount (although perceptions of what constitutes independence vary broadly among the planning community), however planners acknowledge that independence can be costly and hence need to see the value in what they are paying for.

Traditionally advisers have leant on their licensees for support across the core areas of compliance paraplanning, marketing, research, business planning and technical services, and while these facets remain important, they are increasingly being viewed as hygiene factors with little differentiating the larger licensees.

When considering their future business models, licensees should consider what type of restaurant they want to run; one which puts the choice is in the diners’ hands, or one which takes that choice away.

I know which one I’d rather visit.