At the FPA National Conference a few weeks’ ago, the Financial Planning Association announced a significant change in its strategy and the way it would engage with its members; in particular giving individual practitioners within their member base a bigger say in the focus and direction of the FPA.

While the verdict is still out on what impact this will have on the FPA, this markedly significant shift poses an interesting question for other organisations also, such as – When(or how often) should you revisit and change your business strategy?

If we look across the financial planning landscape, we can actually see that, for the better part of the last decade or so, most business have been quite stable and conservative in the way that they have operated.

But are financial planning businesses due for a change?

Take the FPA as an example. Their recent changed was triggered not by regulation or the GFC. Rather, their change was a response to feedback from, what are effectively, its customers – the members who’s fees pay for the day-to-day operation of the Association.

Indeed, of all the reasons that an organisation’s strategy might change, responding to the changing needs of its customers is one of the primary reasons that justify a major shift in the strategic direction of a business.

This paints an interesting picture for financial planning, as the predominant customer base that the industry has historically been built on – the baby boomers – has already started to fragment and disappear as the baby boomers start to retire; the next generation of accumulators are preparing for the latter half of their life; and Gen X and Y are entering and establishing themselves in the workforce.

Consider, for example, if your practice has pre-dominantly been built on the retiring baby boomer segment, without a change in direction, what will happen to the business in another 10 years once that segment either passes away, or in their retirement, decide to discontinue their planner relationship?

What if your business has been built on baby boomers (who will now be heading towards their 60-70’s), and as part of your succession planning, you are bringing on new planners who are 20-30 years younger than your clients? How reasonable is it to expect a 60 year old to pay for and take advice from a 30 year old?

In both cases, the solution is seemingly obvious. In order to ensure the longevity and sustainability of your business, you will need to seek out new markets and reduce your reliance on a market that has a limited remaining lifespan.

And in that very act, the strategic direction of your business, and the other facets that go with it, such as branding, marketing, etc., have to change to enable that new reality.

So if we look at the financial planning industry on a strategic level, the answer is very much “Yes”, the industry is due for a change.

Will it be a very quick and sudden change? No. But is it a real change? Very much so. Are they avoidable? Very unlikely.

Fortunately, the upcoming reforms provide an excellent opportunity to not only review the long term direction of your business, but also to use as a rationale to explain any changes you make to your existing customers – which is one of the biggest factors that put businesses off changing their plans: fear of upsetting their existing clients.

So taking the lead from the FPA, does it make sense for you to take another look at your client base and revisit the strategic direction of your business? Are you on the right path to ensuring that the long term future of your business is secure? Is it time for your business to change?

Until next week.

Lap-Tin