With a lot of advisory practices struggling to earn cash due to the global financial crisis (GFC), many are making money by reducing the business expenses they can control, independent advisory Business Health partner Terry Bell said.
"Since the last quarter of the 2008 calendar year, reducing expenses has become a key focus for many practices that want to see an immediate impact on revenue," Bell said.
Business Health, which operates in Australia, the United States, South Africa and the United Kingdom, reported that the trends of what businesses were doing to make money in various countries did not differ.
"Asking for referrals at every opportunity is a great start," Bell said.
"You can do this in meetings, add a reminder at the bottom of emails and newsletters, or ask clients to bring along friends when you host seminars as a way to increase prospects."
It was also important to increase the frequency of client contact whether they be business or social calls, particularly with A-class clients.
"Our figures show that advisers who contact these clients less than five times per year earn an average profit per principal of $92,485, whereas those who get in touch more than ten times per year earn $165,510," Bell said.
Offering to review the financial plan of key referral sources or the adult children of A-class clients at no charge was another trend, as was expanding services through attaining new qualifications or setting up referral arrangements.
"To increase revenue, advisers should delegate more back office work to enable more time in front of clients, and as client thirst for knowledge and networking has increased since the GFC, now is an opportune time to review meetings, client events and seminars," Bell said.
