The document discusses challenges facing financial advisers and insurers in building long-term relationships. It finds that business valuations for advisers are disorganized and do not support long-term relationships. Both advisers and insurers say they prioritize quality, long-term partnerships, and business value, but their actions focus on short-term sales goals. The document also outlines challenges such as low brand loyalty and agent attrition that the industry faces. It proposes solutions like helping advisers develop professional teams and systems through coaching and shared platforms.

1. Adviser Businesses
Building a Long-
Term Relationship
6 October 2014
Russell Hutchinson
www.chatswood.co.nz
1

2. Background To Review
Recently helping advisers with business valuations we found:
• The experience is awful. A mess. Ad hoc, incoherent, unreliable,
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unprepared
• Does not reflect well on your business.
• Does not support you in your bid to forge long-term relationships
with advisers
Business valuation is only one aspect of a system in which we talk
about long-term, quality, and sustainability, but act in a different way.
We think it is time to change that

3. Why Financial Advisers Are Often “Stuck”
Although they typically earn a high income they are often unable to grow
See commission
as limit
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Too Small
Low
Growth
Low
Efficiency
Low
Investment
Risky
Can’t
Recruit
Spend all they
earn
Fear
Hard to see this

4. Insurers Are Not ‘Walking the Talk’
They say… …They do
Quality is important …pay most for new business, report on new
business every day, and quality quarterly,
and business value – only when asked
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Long-term
relationships
preferred
…spend time hunting new relationships
Existing business
retention is critical
…systems are geared up towards gaining
new business
Advisers think short
term
…are always focused on short-term sales
and growth
We think long-term …but act short-term with sales incentives,
changes to non-medical limits,
commissions, offers, and targets

5. Advisers Are Not Walking the Talk
They say… …They do
I don’t churn But many replacements initiated by an
adviser have little or no comparative
rationale
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I want a business
partnership
Advisers have seven product supplier
relationships
I care about quality They have limited measurement, rarely
decline a sale, or use spread commission,
and have poor systems for after-sales
service
I want to build the
value of my
business
But many do churn existing business, have
little or no capital and low investment in
advice-giving systems, or brand

6. 6
Industry Challenges
For Insurers
• Online information and activity proliferation
• Low perceived brand loyalty
• Low public integrity bias around agents
• Agent attrition and ageing
• Challenges in controlling sales process
For Advisers
• Good incomes
• Can’t get past “an income” to “business owner”
• Incremental recruitment doesn’t work
• Outsourcing admin helps – but it isn’t leverage
• Lack of skills: process, recruiting, management
If you would
like to address
these
challenges
with some
innovative new
approaches,
call us.
www.chatswood.co.nz

7. Unhappy Valley – Recruitment Trap
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www.chatswood.co.nz

8. Problems and Solutions - Overview
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Micro-business
– low
investment
Leverage the
work of others
– build a team
Scared to
Invest
Build a
marketing
engine and
referral network
Poor systems
for advice &
retention
Develop a
professional
administration
on a single
platform
Poor
Management
Poor Retention
of clients and
advisers
Coach in
business
management,
measure, and
support
Create a
locality brand
that dominates
the market in a
few square
miles
There have been very few deliberate, systematic, efforts to transform
adviser firms in this way. What approaches have been made, have had
substantial limitations.

9. Thank You!
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© Copyright held by Chatswood Consulting Limited
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