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2010 could be your year for growth

What a year we are facing. The industry will undergo an unprecedented level of change, and for some advisers it will just be too much and they will choose to exit.

However, for those advisers who we at Strategi have been working with in recent years, 2010 could be your year. Sure, you will have some challenges to face, but your challenge will in most cases be minor compared to what the majority of advisers will have to undergo.

Your time in the sun is likely to come about August or September. Provided by that time you have freed yourself up and obtained the Level 5 National Certificate in Financial Services (Financial Advice) (Level 5), completed the regulatory requirements and freed-up some capacity within your business, then you will be ready to grab the opportunities that 2010 will potentially throw your way.

Strategi’s prediction for 2010

By August or September, a number of advisers (mainly risk advisers) will realise one or more of the following:

  1. Their client base is too large and they will not be able to service it properly in the new regulatory environment.
  2. They are not going to make enough money as a ‘one man band’ under the new regime.
  3. They are not going to get compliant and introduce all the required systems and technology by themselves.
  4. They realise they know less that what they previously thought they did (however egos may prevent this reality sinking in).

The outcomes of the above are:

  1. A number of risk advisers will sell off their investment books and just focus on risk and mortgages.
  2. A number of advisers will sell all their business and exit.
  3. Some will sell off their lower value clients.
  4. A number will realise they need to merge or co-locate in order to obtain economics of scale.
  5. Valuations on some books of business could fall.

The latter part of 2010 could be a time for you to acquire books of business at historically low values. It could be a time for mergers and consolidation, enabling your to grow your business through acquisition rather than organic growth.

Organic growth opportunities

I believe there will also be organic growth opportunities for you – the potential is higher than ever before. Let’s explore why:

  1. Two thirds of eligible Kiwis still do not have KiwiSaver. This is a massive opportunity.
  2. The public still has a need for advice and is actually seeking on-line for providers of quality advice.
  3. Many of your potential competitors will be too busy doing their Level 5 qualifications and trying to get compliant and will not be focusing on servicing their existing clients or finding new ones.
  4. Recent international research shows that 64% of investment adviser clients would switch adviser, if they could identify a new one they trusted and the cost and process to switch was cheap and easy.

My view is ‘go for it!’ If you have your act together whilst others don’t, then that creates massive opportunities. We at Strategi are here to assist you to make 2010 a boomer year.

David Greenslade