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The IFA Growth Guide: 5 Signs It’s a Good Time Implement a Growth Strategy for your Financial Services Firm 

The most profitable businesses are typically those that scale, and do so efficiently.

In the services sector though, efficiently expanding a business can be particularly difficult. That’s because the adviser often comprises of the core value of their business; the stuff that makes your business unique, and keeps your clients coming back to you.

Growth of financial services businesses isn’t impossible however, it’s just more important to get the strategy right so that you don’t limit growth or lose the essence of your firm.


5 Signs Now's a Good Time to Expand your Firm

The most common indicators that it’s time to scale your financial services firm include:

  1. You’ve refined your offering
  2. Cashflow is positive
  3. Customers are happy
  4. You’ve got to knock back opportunities due to a lack of capacity, making long-term business goals unattainable
  5. Work-life balance is taking a hit and negatively impacting your work and your home life, or that of your staff

Also worth a consideration: as reported last year, there’ve also been several market shifts in play, representing exciting growth opportunities for advisers.

So, now’s the time for growth – what’s the best approach?

Just how directors adapt their business model to the growth opportunity before them is critical for successful, scalable expansion.

Financial Services Growth Strategies: Scaling Up vs Growth

Although “business growth” and “scaling up” tend to be used interchangeably, there are a couple of important distinctions between the two terms.

“Scaling up” refers to boosting business revenue without much, or without any more effort.  

“Growth” meanwhile, is defined by increasing revenue by adding more resources like employees, new offices, or products.

How to Grow your Financial Services Firm

The two most common growth models in financial services are to either hire staff or to acquire another adviser’s books.

When hiring for growth, runway, or the amount of time your firm can remain operational before it’s out of money is a major consideration.

Another common growth strategy is the acquisition of another advisory firm, almost instantly boosting clients, resources, and revenue potential.

How to Scale Up Your Financial Advisory Firm

On the other hand, scaling up refers to strategies that enable your firm to handle growth without suffering in other areas like employee turnover due to heavy workloads, or the cost of product development for new markets.

The most common methods of scaling up is the implementation of software which streamlines or automates processes, and outsourcing components of work.

Software that digitises manual processes and even better, automates tasks like reporting, offers exponential scalability for financial firms.

Meanwhile, partnerships and outsourcing specialist or necessary tasks allows the financial firm to avoid paying for ‘bums on seats’, desks and software licences, but can remove mission-critical components of your business, like SMSF lodgements. 

What’s Best, Scaling Up or Expanding your Firm via Growth?

Unlike growth models, scaling up via software and partnerships remains relatively predictable and consistently low on cost yet, the firm with scalability also remains flexible to peaks in demand with relatively less pain than if responding by investing in resources. 

Moreover, implementing scaling techniques removes ‘noise’ or demands from the adviser that otherwise distract focus from high-value tasks like client meetings.

If you’ve got the five signs it’s time for growth of your firm, scaling up offers a more predictable, lower-risk strategy than adding more resources. It can also be much cheaper than an acquisition. However, scaling up as a growth strategy for your advisory business is not without risk.

What to Optimise, Outsource or Automate?

The most important decision for advisers when scaling up is deciding:

  1. what to outsource
  2. what to automate and
  3. what to keep in-house.

Advisors should avoid negatively impacting the essence of your services – the reason your clients like your business and your success to-date.  When deciding how to scale up, it’s time to evaluate the core product your firm offers. And it’s time to get forensic on audience needs so that you don’t cut out what it is that makes you and your firm irreplaceable from your client or prospective market’s perspective.

Next in our Growth Guide for IFAs: we talk about how to make these decisions so that you can improve your chances of outsourcing and automating to scale with efficient success.

Interested in accelerating your scale? Talk to Intello about how our SMSF Administration Services have helped 130+ firms to grow.


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