Peter Hewett CFP®, Hewett Wealth
Having spent over 30 years in the financial planning industry, my journey has been one of continuous learning, adaptation, and growth.
As the founder of Hewett Wealth, I’ve had the privilege of witnessing the evolution of the industry and have built a practice grounded in professionalism, transparency, and long-term client relationships. Here, I’ll share some insights into how the industry has changed, what we’ve learned, and how financial advisors can build a sustainable, client-centered business.
When I started out in the industry, there were minimal regulations governing how financial planning practices operated. Over the years, the introduction of legislation like the Financial Advisory and Intermediary Services (FAIS) Act and all subsequent legislation has brought about significant changes, professionalising the industry and ensuring that clients receive more transparent, fair, and value-driven services.
This increased regulation has undeniably benefited the industry by raising standards and ensuring that financial advisors are more accountable to their clients. However, it has also presented challenges, especially for smaller advisory practices that may struggle to keep up with the pace of regulatory changes. Integrating technology effectively into your business can help overcome many of these regulatory and compliance challenges and ensure you remain fit for purpose in this ever-changing environment.
Additionally, the Financial Planning Institute’s emphasis on achieving CERTIFIED FINANCIAL PLANNER® has elevated the profession, allowing clients to receive advice from highly qualified professionals. This shift has been instrumental in helping clients distinguish between different levels of expertise within the industry.
The Changing Landscape of Financial Products
One of the most notable changes over the years has been the expansion of available financial products. Today, there’s a vast array of products that cater to almost every conceivable financial need. While this variety offers more options for clients, it can also be overwhelming, leading to more complexity and ultimately more confusion.
As financial advisors, it’s our responsibility to ensure clients fully understand the products they’re investing in, including the risks, tax implications, liquidity, and long-term impact on their financial goals. At Hewett Wealth, we have a Product Approval Committee that conducts thorough due diligence on every product before it is made available to clients. This process ensures that we only offer solutions that align with our clients’ needs and expectations, providing them with peace of mind and clarity.
However, one concern I have with the current product landscape is the prevalence of overly complex products and legacy products that still penalise clients with high fees if they wish to exit or alter their investment. Moving forward, the industry needs to prioritise offering simpler, more transparent products that genuinely serve the client’s best interests.
Advice for Building a Sustainable Financial Planning Business – For financial advisors who want to build a sustainable business, it’s crucial to recognise that this industry has moved from being sales-driven to relationship-driven. Clients are not looking for salespeople; they want trusted partners who understand their needs and are committed to helping them achieve their financial goals.
Here are some key principles for building a sustainable and client-centric practice:
- Establish a Clear Value Proposition: Your value proposition should be well-defined and communicated to your clients. It should reflect the level of service, expertise, and commitment you offer. It is important to implement a revenue model that provides sustainable, ongoing earnings aligned to the value that you provide rather than rather than relying on upfront commissions.
- Separate Business and Personal Finances: Treat your practice as a formal business, separate from your personal finances. This will make it easier to manage cash flow, understand your true income and expenses, and build a practice that can be valued and sold in the future.
- Implement Strong Processes and Systems: To deliver on your value proposition consistently, you need robust processes and systems in place. This includes utilising technology to streamline operations, manage compliance, and provide seamless service to your clients.
- Develop a Continuity Plan: Ensure that your practice has a continuity plan in place. This includes having buy-sell agreements with partners and communicating your continuity strategy to staff, ensuring they understand that the business has a future beyond any single individual.
- Adopt a Salary-Based Model: At Hewett Wealth, all of our staff, including advisors, are salaried rather than commission-based. This approach ensures that clients receive unbiased advice and that our advisors are focused on providing the best possible outcome for our clients rather than chasing commissions.
- Prioritise Client Relationships: Building strong, long-term relationships with clients is the cornerstone of a sustainable financial planning business. When clients trust you and feel valued, they will refer others to you, leading to organic growth through word-of-mouth.
The Importance of Continuous Professional Development – In today’s dynamic financial landscape, staying updated with local and international events, legislation, industry trends, regulations, and best practices is essential. While many advisors view Continuing Professional Development (CPD) as a checkbox exercise, it should be much more than that. It’s about equipping yourself with the knowledge and skills needed to deliver on your value proposition.
TAKE THE ‘ADMIN’ OUT OF ADMINISTRATION.
Whatever your present challenges and future goals, C360 provides the best possible platform for building powerful, business-enabling solutions that future-proof your business while providing operational efficiency and regulatory peace of mind.
At Hewett Wealth, we cover the costs of all required training for our staff and encourage continuous learning. We focus on CPD programs that add real value to our business and that are aligned to our value proposition, allowing us to pass that knowledge on to our clients and ensuring we remain at the forefront of the industry.
Encouragement for New and Existing Advisors – The financial planning industry can be demanding, especially taking account of the increasing complexity and regulatory requirements. However, it’s also an incredibly rewarding career where you have the privilege of building lifelong relationships with clients and helping them achieve financial security for themselves and their families.
For those who feel overwhelmed by the challenges, remember that this is a journey. Building a successful practice takes time, dedication, and a commitment to doing the right thing. Leverage technology, stay informed, and always prioritise your clients’ needs. If you’re starting out, consider joining a larger practice to gain experience before venturing out on your own. This approach can help you build a foundation and develop the skills needed to manage your own practice effectively.
The financial planning industry has evolved significantly, and while it presents challenges, it also offers immense opportunities for those willing to adapt, learn, and put their clients first. By embracing professionalism, transparency, and a commitment to building meaningful relationships, you can create a practice that not only thrives but also makes a lasting impact on the lives of your clients.
After all, there’s little more fulfilling than walking alongside your clients on their financial journey, helping them navigate life’s uncertainties and achieve their dreams. That’s what makes this industry truly special.