Dont Change Your Licensee Lightly

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Dont Change Your Licensee Lightly

• Mark Spiers
• CEO, Magnitude Financial Planning

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What are you looking for?

• In simple terms Advisers are looking for 4 key
  things
• Capabilities that make me money
• Capabilities that save me money
• Help me to grow my business
• Help me to realise its value

If I was a rich man. Fiddler on the roof
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Industry observations and trends

• Practice diversity - it will be increasingly
  difficult for many licensees to meet the diverse
  needs of their practices
• Repositioning - between Licensees and Practices
  is gaining momentum
• Practice drift - is underway
• Licensee Value Proposition - successful licensees
  will focus through their distinct LVP on one or
  two practice (B2B)segments

• everything a practice needs and nothing they
  dont

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Industry observations and trends ...

• Client Value Proposition (CVP) - Practices in
  these B2B practice segments will themselves focus
  through their distinct CVP on a client B2C
  segment
• Alignment success in the future is the
  alignment between the Licensee Value Proposition
  and the client value
• Fit - there is no perfect fit, only a best fit.
• Values and objectives - are important , shared
  values create shared value!
• Future Economics old world thinking will be
  replaced by new world focus and segmentation.

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Presentation Overview

• Part 1 - Should I stay or should I go?
• Licensee evolution
• Understanding what is working and what's not.
• Key reasons advisers leave Licensees.
• Identifying objectives and requirements
• Part 2 - Profitable Partnerships
• Resolving the issues where you are
• Developing a plan to address what is not working
• Finding out and evaluating whats on offer
• Working together for a win win outcome
• Initiatives Licensees can take to retain
  Practices/advisers
• Part 3 - Implementing the optimal outcome
• Developing and implementing the optimal outcome
• Own license or join another licensee?

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Part 1 Should I stay or should I go?

• Part 1

If the thrill is gone, it's time to take it
back. Meat Loaf
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Licensee Dynamics

• The Homogenous Profile
• Practices
• have simple Licensee needs
• relatively undemanding
• Licensee
• catch as catch can
• can satisfy practice needs

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Should I stay or should I go - external forces.

Advisers are in a position of power.
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Licensee Dynamics
The Kinetic Profile Licensee - Increased practice
diversity - Cumbersome and inefficient - Unable
to satisfy all practices Practice - Needs become
more complex - Increased practice
dissatisfaction - Practices move and change
faster than Licensees
I'd rather be a hammer than a nail. Simon and
Garfunkel
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Should I stay or should I go internal
forcesWhy advisers leave their Licensee.
Culture and environment
Id love to stay, but that would keep me from
going. Groucho Marx
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Licensee dynamics
The Polarised Profile Practice - Needs clearly
known - Seeks to preserve culture - leaves or
gravitates to be with like minded
advisers Licensee - Segmented offering - Not
suitable for all practices - Lack of single
focus - trying to be all things
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Should I stay or should I go - the Licensee
challenge

• 4 Core Practice Profiles and their needs

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Licensee dynamics
The Focus Profile Practice and
Licensee - Needs aligned - Focused networks of
like-minded practices - Smaller, more agile and
profitable - Best fit effective services and
support - Targeted offering to clients

• Everything you need and nothing you dont.

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What is your best fit?
Sinkers
Retirers
Coasters
Growers

• 4 Core
• Practice Profiles

4 Licensee Profiles
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Part 2 Profitable Partnerships

• Part 2

Torvill Dean
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Profitable partnerships what are they?

• An environment of alignment, profitability and
  sustainability for the client, the adviser and
  the Licensee

The Sweet Spot
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Profitable partnerships what are the must
haves?
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Start Stay or go?
Developing the optimal outcome
Dissatisfaction with current dealer
Able to make a rational or objective judgment?
Get outside adviser to look at the issues help
develop action plan
No
Discuss issues with current licensee
Yes
Yes
Are the issues resolved?
No
Yes
Stay
Identify Must haves
Survey the market
Ongoing half yearly review with licensee to
measure effectiveness
Develop a shortlist
Set up own License
Can you do detailed due diligence yourself?
Decide on the new licensee
Develop a transition plan
Yes
Move
No
Get outside help
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Part 3 Developing the optimal outcome

• Part 3

Dissatisfied with what I am, I want to be a
better man. The Kinks
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Developing the optimal outcome - resolving the
issues where you are

• Resolving the issues
• Identify whats not working and what is
• Confirm shared vision and shared values
• Understand existing agreements
• Develop a plan to address what is not working
• Put in place checks to prevent a reoccurrence of
  the breakdown

If you cant be with the one you want love
the one youre with Crosby Stills Nash Young
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Developing the optimal outcome - evaluating a
dealer fit
Whats missing for you?
Business Model Alignment- Shared vision -
Approach to business growth - Succession -
Business coaching
Culture- values- like minded team
Hygiene factors - Economics - Basic Planning
tools, Product List, etc
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Developing the optimal outcome - going your own
way

• Getting your own license
• Speak with others who have post-FSR experience
• Ensure you have great and committed staff
• Use a strong compliance provider for 6 monthly
  audits
• Look for how you can get buying power
• Join a co-operative or association of other
  boutique operators

• You can go your own way
• Fleetwood Mac

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Developing the optimal outcome implementation
tips.

• Legal review existing and prospective new
  agreements
• Add ons check on additional costs to the
  Licensee split e.g. PI,IT, Marketing, PD Days,
  Conferences.
• Equity but how liquid is it?
• Cost of change Transition support s,
  systems, client leakage.
• Research the Licensee speak with existing
  advisers, fund managers, trade media articles,
  Google, ASIC.
• PI terms, exclusions
• I get knocked down, but I get up again. Your
  never gonna keep me down. Chumbawumba

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Profitable Partnerships - Retention initiatives
that Licensees can take

• Learn
• Listen
• Identify the issues
• Act - agree a set of actions to address the
  issues
• Deliver on those actions
• Review progress
• Dont try to hold advisers by force (it will
  reflect badly)
• Put in place come and go terms

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Summing up .

• Practice diversity - it is very difficult for
  many licensees to meet the diverse needs of their
  practices
• Licensee Value Proposition (LVP) - in the future,
  successful licensees will focus through their
  distinct LVP on one or two practice
  (B2B)segments.
• Client Value Proposition (CVP) - The practices in
  these B2B practice segments will themselves focus
  through their distinct CVP on a client B2C
  segment
• Repositioning - between Licensees and Practices
  is gaining momentum
• Practice drift - is underway - often more a
  case of misunderstood needs than irreconcilable
  differences

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Summing up..

• Alignment success in the future will be based
  on the strength of the alignment between the LVP
  and the practice CVP
• Fit - If it comes time to change - there is no
  perfect fit only a best fit.
• Values and objectives - are important , shared
  values create shared value!
• If you need to move - be considered and thorough
• If you decide to do it - DO IT - but dont do it
  lightly!
• Thinking is the best way to travel. The Moody
  Blues

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Thank you

• Mark Spiers, CEO
• Magnitude Financial Planning
• 1300 366 416
• mark.spiers_at_magnitude.com.au