Pressure is mounting on dealer groups to provide greater support to their member firms in light of current reforms, pending legislation and greater demand for transparency from clients, independent advisory firm Business Health has reported.
"As advisers grapple with what they can do for clients and what and how they should charge their clients, dealers are grappling with the same issues in regards to their member firms," Business Health partner Rod Bertino said.
"Roughly 47 per cent of advisory firms are in bad health due to poor organisation at the moment and dealer groups need to step up and ensure these firms have the support and assistance they need to prosper post the introduction of possible new legislation."
Dealers needed to recognise there were a number of firms that needed help with everything from business and succession planning and segmenting clients, to developing effective review processes and ways in which they could retain good quality people, Bertino said.
"Only 57 per cent of firms have a fully documented business plan and only 46 per cent have a recently reviewed succession plan. Just 45 per cent have a disaster recovery plan, with only 58 per cent of firms seeking external input from a professional," he said.
For those practices that required greater assistance, the first place they would and should look to was their dealer, he said.
"For businesses that plan appropriately, they can earn an average profit 165 per cent higher than those that do not, so it's in the dealer's best interest to support them in doing that," Bertino said.
Considering that member firms were asking more of their dealers, Bertino said it was also not unlikely that dealers might begin charging higher fees for improved services.
