Summary - Enhancing Your Technology, Business & Client Experience 2

In today’s rapidly evolving financial services environment, it is no secret that operational excellence underpins a successful advisory practice. Although many advice businesses place heavy emphasis on client-facing roles—primarily on financial advisors themselves—there is growing recognition of the criticality of the “engine room.” This engine room comprises operations personnel, administrative staff, paraplanners, and other support functions who work relentlessly to ensure the smooth delivery of quality advice.

Research from a partnership between CFS (Colonial First State) and Elixir Consulting, spearheaded by Sue Viskovic and her colleague Lana Clark, confirms not only that the operations function directly impacts the bottom line but also how vital people, processes, and culture are to a firm’s sustained profitability. Below is a deep exploration of these insights—anchored in the data collected from a wide and diverse sample of Australian advice businesses—and a discussion of how professionalism and ethics weave through every strategic and operational choice.

1. Research Overview

Diverse Participation and Representation
To assess how operations can help drive profitability, Elixir Consulting collected responses from 171 financial advice firms. These ranged from single-advisor practices to large, multi-advisor businesses. In total, participants represented:

• 561 financial advisors
• 43 risk specialists
• 72 accountants
• 25 mortgage brokers

Geographical representation stretched across all Australian states and territories (except the Northern Territory), ensuring a broad perspective. About 37% of the firms were self-licensed, with the remainder distributed among small, medium, and large licensees, making the findings relevant across the profession.

Why Operations?
Despite operations personnel rarely stepping into the spotlight, these roles are catalysts for quality advice, positive client experience, and business efficiency. Understanding how to value and measure their contribution is both ethically responsible—clients and staff deserve consistent, robust processes—and commercially advantageous.

2. The People Factor: Staffing, Involvement in Strategy, and Retention

2.1 Involving Staff in Strategic Planning

One of the most critical insights from the research is the importance of staff involvement in strategic decision-making. In professional services, people are the essence of the product; without talent and well-supported professionals, advice simply cannot be delivered.

• Finding: 49% of participant firms involved staff members in strategic planning where it was appropriate. Another 25% involved only the practice principal(s).
• Impact on Profitability: Firms that involved employees in strategy setting reported higher average EBIT (Earnings Before Interest and Tax) of 25%, compared to 20% among those whose principals alone crafted the strategy.

Ethical Dimension: In an industry rooted in trust and fiduciary duty, an inclusive approach to strategy sets a tone of respect and transparency. When staff members understand the “why” behind business goals, their alignment with compliance and best-interest obligations grows. It also fosters an environment that recognizes every individual’s contribution, strengthening accountability and, ultimately, the quality of service to clients.

2.2 Staff Retention and Job Satisfaction

Remuneration vs. Fulfillment
Although salary levels are critical, the research underscores that employees often leave only after dissatisfaction builds. Factors such as feeling undervalued, excluded from decision-making, or lacking acknowledgment of their efforts can outweigh marginal differences in pay.

Engagement, Culture, and Values
Involving employees in planning not only drives efficiencies but also fosters loyalty. When staff have a say in shaping operational improvements, they feel ownership over the results—and are more inclined to stay. This stability becomes a competitive edge, reducing the cost and time required to hire and train new personnel.

Ethical Dimension: Fair pay, a culture of open communication, and career development pathways reflect responsible employment practices. From an ethical standpoint, respecting each team member’s potential and viewpoint contributes to a stable and positive work environment. Advisory firms with high turnover risk losing institutional knowledge, undermining the quality of advice provided. A stable workforce, by contrast, can uphold consistent service standards that reflect well on the professional integrity of the firm.

3. Culture as a Profit Driver

Culture can often feel intangible—something “in the air.” However, the research links a positive internal culture with higher profitability, lower staff churn, and better overall performance.

3.1 Defining and Living Values

Articulating Values
Culture starts with defining a clear set of guiding principles that reflect the founders’ or principals’ core beliefs. Though many might default to generic terms such as trust and integrity, real impact comes from adopting values that reflect the personality and identity of the firm: for instance, “We prioritize collaboration and continuous improvement,” or “We take care of each other and our clients.”

Embedding Values
Firms that successfully manage their culture treat values as a living framework. Managers refer to them during recruitment, performance reviews, and recognition ceremonies. Conversely, if an employee habitually disregards professional respect, the values framework provides a rational, measured way to hold them accountable.

3.2 Measuring Culture’s Impact

In the study, respondents were asked to rate their culture on a scale of one to five. Those who scored themselves five out of five for culture:

• Averaged 24.2% EBIT.
• Reported satisfaction levels of 4.07 (out of five).

Those who graded themselves three or lower for culture:

• Had an average EBIT of 19.6%.
• Registered satisfaction scores of 2.8 out of five.

Clearly, the intangible impacts the tangible: a robust culture correlates with superior business outcomes and personal fulfillment for the owners and staff alike.

Ethical Dimension: A positive culture is not simply about workplace perks; it transcends to how clients are treated. If staff feel respected and recognized, they are more likely to apply these same values to client service. Respect, empathy, and honesty are building blocks for ethical client relationships—leading to improved trust and better long-term advisory outcomes.

3.3 Fostering a Culture of Continuous Improvement

A hallmark of successful advisory practices is the mindset that processes, team dynamics, and technology implementation can always get better. For small firms, a principal’s natural leadership style often sets the tone. For larger firms, regular surveys and feedback loops—whether anonymous or not—help highlight any emerging cultural problems, such as workplace bullying or communication breakdowns.

Practical Steps

1. Formalize Guiding Principles: Work collaboratively to develop statements that reflect the distinct identity of the firm.
2. Train and Onboard: Integrate cultural expectations and values into every new-hire onboarding process.
3. Regular Surveys: Use short, regular staff surveys or focus groups, clarifying whether they are confidential.
4. Leadership Buy-In: Ensure directors, owners, and senior managers exemplify the behaviors they want replicated.

Ethical Dimension: Continuously improving culture has a direct bearing on professional conduct. In financial services, staff must remain vigilant about compliance, risk controls, and consistent application of guidelines to protect the client’s best interest. In a supportive, improvement-oriented culture, employees are more comfortable speaking up if they spot potential ethical breaches.

4. Process, Productivity, and Profit

4.1 The Importance of Documented Processes

Operating in a highly regulated industry, financial advisory firms constantly manage regulatory updates and product-provider process changes. While many owners acknowledge that processes are essential, the day-to-day pressures often relegate process documentation to the bottom of the to-do list.

Research Findings

• Only 35% of participants had fully documented their processes.
• 32% of respondents cited “outdated or inconsistently followed processes” as their biggest frustration.

Despite it being perceived as tedious, effective process documentation helps avoid costly errors. When staff know precisely how to complete an administrative or compliance-related task, they are far less likely to make a misstep that could lead to expensive rectification or potential client dissatisfaction.

4.2 Correlation with Profitability

The data show that firms with well-documented processes recorded a 24.8% EBIT on average and an above-average satisfaction rating (3.8 out of five). By contrast, those with no documented processes at all reported just 19.5% EBIT and 3.44 satisfaction.

Speed to Market: Client Advice Turnaround
A powerful indicator of operational efficiency is how quickly a firm can issue advice after the client’s initial engagement. For those that deliver advice in under three weeks, average EBIT soared to 29.2% with a satisfaction score of 4.2 out of five. In contrast, those that consistently took more than eight weeks dropped to 22% EBIT and 3.3 satisfaction.

Ethical Dimension: Proper, updated processes ensure consistent compliance with regulations. When processes are vague or unwritten, the risk of oversight grows—potentially jeopardizing clients’ interests. A well-documented, regularly updated process acknowledges the ethical obligation to deliver accurate, timely advice. Rushed, ad-hoc workflows can lead to errors in financial recommendations, possibly contravening best-interest duties.

4.3 Continuous Improvement and Technology

Documenting processes is not the end. Once established, businesses must adopt a “continuous improvement” mindset, regularly updating workflows to reflect changes in providers’ platforms, regulatory shifts, and new technology solutions. This dynamic approach offers two immediate benefits:

1. Risk Mitigation: Strict guidelines reduce variability and ensure compliance, lowering the chance of errors that could harm clients or damage reputations.
2. Efficiency Gains: Comprehensive processes allow technology, such as workflow automation tools and integration with platform data, to generate genuine time savings. If a firm invests in software that automates portfolio rebalancing, for example, consistent, documented processes make that automation reliable and replicable.

Ethical Dimension: In a profession built on trust, technology must be deployed responsibly, ensuring confidentiality and data security. Clear processes help preserve these ethical standards, preventing the mishandling of sensitive financial information.

5. The Rise of Managed Accounts

Traditionally, advisory businesses invested heavily—sometimes literally—in custom investment solutions and portfolio construction. With the increasing availability and sophistication of managed accounts, the operational and profitability picture has changed considerably.

5.1 Time Savings and Scalability

According to the study, about half of the participating firms now use managed accounts. Notably, 85% of advisors within those practices experienced savings of up to 15 hours per week in administrative or portfolio management tasks. Similarly, 62% of paraplanners and support staff also saved up to 15 hours weekly.

This liberated time can be redirected into more valuable activities—such as client reviews, business development, or deepening the relationships that foster loyalty and referrals.

5.2 Profitability Impact

Firms using managed accounts reported an average EBIT of 27.8%, noticeably above the overall average of 23%. Their satisfaction score was 3.8 out of five, underscoring that not only did they earn a higher margin, but practice principals and staff felt more fulfilled.

Scalability Factor
Managed accounts pave a smoother path to managing more clients per advisor. By offloading investment selection and administration, advisors can devote their time to strategic, client-centric tasks. This approach aligns with the principle that an advisor’s highest value is in guiding clients toward financial well-being, rather than operational tasks that specialists or technology can perform more effectively.

Ethical Dimension: In essence, using managed accounts can reduce manual errors and hidden biases in stock selection. More importantly, advisors must retain professional oversight—ensuring the chosen managed account is suitable for the client’s circumstances and aligned with their best interests. A well-run managed account solution can help standardize ethical, suitable portfolio choices, but ethical oversight remains crucial: the advisor’s role is to ensure that no product selection or portfolio approach compromises clients’ long-term goals and risk profile.

6. The Broader Context of Professionalism and Ethics

While the headline numbers—profit, EBIT, satisfaction—grab attention, underpinning it all is the concept of professional integrity and ethical conduct. Financial advice deals with individuals’ livelihoods, hopes, and life plans. Every process, cultural norm, and strategic decision has ethical implications:

1. Fair and Transparent People Management
   • Why it Matters: Supporting a trustworthy workplace aligns with the profession’s broader ethical aims. If staff feel respected, they are more likely to treat clients with the same courtesy.
   • Professionalism: Clear job descriptions, remuneration benchmarks, and staff involvement in decision-making encourage a respectful environment with mutual accountability.
2. Collaborative Culture
   • Why it Matters: A culture of honesty, mutual respect, and openness mitigates ethical risks.
   • Professionalism: Formalizing values helps hold employees accountable if they deviate from professional behavior. It also encourages them to voice concerns early if they detect potential compliance or ethical breaches.
3. Continuous Process Improvement
   • Why it Matters: Regularly updated, accurate processes reduce the chance of missteps that could harm client outcomes.
   • Professionalism: Adhering to documented processes, particularly in a regulated industry, underscores the profession’s commitment to integrity and the client’s best interest.
4. Leveraging Technology Responsibly
   • Why it Matters: While tech solutions offer powerful time savings and reduce errors, they must be implemented judiciously to preserve data security, client confidentiality, and compliance.
   • Professionalism: Responsible innovation—particularly with managed accounts—demonstrates that an advisory business is using its resources ethically to improve client services.

In combining these principles, a firm exemplifies the essence of professionalism: knowledge, a commitment to ethical conduct, and a focus on ongoing development, both of processes and of people.

7. Practical Insights for Implementation

For advisory firm owners or managers looking to implement these findings, here are actionable steps distilled from the research:

1. Engage Your Team Early
   • Why: Involving staff in strategic planning fosters buy-in and yields diverse perspectives.
   • How: Host a strategy workshop at regular intervals. Solicit input from all levels of the organization where relevant—administrators often see bottlenecks or duplications that leaders may miss.
2. Develop (and Update) Clear Job Descriptions
   • Why: Each team member needs clarity around responsibilities, performance metrics, and boundaries.
   • How: Incorporate your firm’s values into written job descriptions and performance appraisals. This ensures alignment with the culture you strive to build.
3. Codify Your Culture
   • Why: High-performing teams consistently report strong cultural cohesion.
   • How: Draft a set of guiding principles. Put them into practice at all levels: recruitment, staff reviews, and everyday decision-making.
4. Document Key Processes
   • Why: Consistent service reduces errors, speeds advice delivery, and supports compliance.
   • How: Start with the most critical, highest-risk workflows—particularly those related to new advice delivery and compliance checks. Use a collaborative approach, inviting frontline staff who know the steps intimately.
5. Automate Where Feasible
   • Why: Integrated technology solutions, including managed accounts and data feeds, can save significant time, freeing professionals to focus on strategic advice and client relationships.
   • How: Evaluate your current platforms (e.g., for portfolio administration, research, or CRM) to identify potential automations. If you aren’t sure how to fully utilize the technology you have, reach out to your provider for training or consultation.
6. Measure What Matters
   • Why: If you are not measuring how well new processes or cultural changes are working, you can’t manage them effectively.
   • How: Track EBIT and the number of clients served per advisor. Conduct staff and client satisfaction surveys. Compare these metrics before and after implementing process or cultural initiatives to measure the effect on profitability and morale.
7. Nurture Ethical Oversight
   • Why: A strong ethical foundation is the cornerstone of any professional service, especially in finance.
   • How: Implement regular compliance training. Encourage a “speak up” culture. If employees fear retribution for pointing out problems, potential issues may remain hidden until they become serious liability risks.

8. Looking Ahead: The Future of Advisory Practices

In an increasingly complex regulatory and economic environment, advice businesses must refine their operations to remain sustainable and profitable. There is little doubt, based on the research, that operational excellence is a direct route to both better financial outcomes for the firm and improved client experiences. Moreover, implementing these operational and cultural best practices can also help a practice stand out in a crowded marketplace—a reputation for professionalism and high ethical standards is a vital competitive advantage.

Key Evolutionary Trends

1. Greater Automation: As technology becomes more sophisticated, tasks such as portfolio rebalancing, compliance documentation, and client onboarding will be further streamlined.
2. Holistic Planning: Advisors will move beyond investments to provide total wealth solutions, from cash-flow analysis to life-stage financial strategies. Operations teams must be prepared to manage diverse services without sacrificing quality.
3. Emphasis on Culture and Staff Development: High turnover is expensive in both monetary and reputational terms. Firms will continue to see tangible returns from building cultures that attract and retain top talent.
4. Professional and Ethical Leadership: Underpinning all these trends is an unwavering focus on ethical client care. With ongoing scrutiny from regulators and shifting client expectations, the businesses that prosper will be those that weave best-interest duties into every operational detail.

Conclusion

The partnership between CFS and Elixir Consulting has illuminated the powerful role that well-managed operations, strong culture, and strategic use of technology play in running a high-performance advice business. From the perspective of professionalism and ethics, the findings underscore that serving clients ethically and efficiently are not opposing goals; on the contrary, they reinforce each other.

When staff are involved in decision-making, when processes are documented and consistently improved, and when technology is adopted strategically, advisory firms see higher EBIT, greater satisfaction among principals and employees, and, most importantly, better client outcomes. This synergy of professionalism, ethics, and operational excellence paves the way for the modern advice practice—one that is profitable, sustainable, and genuinely focused on the best interests of its clients.

By embracing these insights, advice business leaders can transform the so-called “back office” into the true backbone of the practice—an engine room of innovation, compliance, and sustainable growth. The results speak for themselves: streamlined processes, committed staff, and a robust culture are cornerstones of both ethical financial advice and a thriving bottom line.

Accreditation Points Allocation:

0.10 Technical Competence

0.10 Client Care and Practice

0.10 Regulatory Compliance and Consumer Protection

0.10 Professionalism and Ethics

0.40 Total CPD Points