With financial futures uncertain, many businesses will be worried about their cashflow and strategy over the next few months - and for new adviser businesses still in the phase of establishing themselves, the challenge will be even harder.
Financial Advice New Zealand members say the key over these coming months is to not bury your head in the sand. They believe that this is a challenge which needs to be met head-on, and the ones who can work hard, communicate and develop relationships with their clients will be the ones who emerge with their business still standing.
Speaking about his own experience, Tim Fairbrother of RIVAL Wealth highlighted that his own business was founded during the Global Financial Crisis - something which brought significant challenges, especially when it came to costs and business continuity.
“We were a new business 10 years ago when the GFC was happening, and the key thing was costs - we were trying to keep those costs down as much as possible,” Fairbrother said.
“That’s something that you can control. However, there are obviously also many things which are outside of your control.”
“If you’ve got a bigger business with staff and lots of clients, you need to be paying someone to service them - so sometimes costs and staff go hand in hand, and that can be a difficult thing to juggle,” he noted.
“Businesses need to think about how that all fits together, but you can’t have the ostrich approach and bury your head in the sand.”
Fairbrother says that this period could be the best time to get your educational requirements in order, do your Level 5 and get a business continuity plan together. At the same time, he says advisers should be putting their relationships with their clients front and centre.
“There’s a saying that ‘the harder I work, the luckier I get,’ and I think that’s very true in this situation,” Fairbrother said. “You’ve got to work harder over the next six months or so than you’ve ever had to before, and that will really separate those who come through the other side of this, and those that don’t.”
Business adviser and longstanding industry player Tony Vidler says that new advisers should seek guidance from those who have come up against similar challenges before, while also seeking out any business opportunity that still remains in the market - even if that means foraying into an area you may not have worked in before.
“We need to tap into the relationships we have with the more experienced, senior people within the industry, and there are lots of good people here,” Vidler said.
“A lot of the older people have seen some of this before and do know some shortcuts, so we can help head off some mistakes.”
“The second point is that there’s also still plenty of business out there,” he continued.
“It may be very hard to do mortgage broking at the moment, but that doesn’t mean there aren’t other areas of financial services where you could do some work. You just need to go to where people do have jobs, and do still have business. And finally, you just have to hustle - work the phone, talk to people, be busy.”
John Bolton, founder of Squirrel, says that sometimes, it can pay to plan out the worst-case scenario.
“Plan for the worst, and hope for the best,” Bolton said.
“If you understand what the downside risk looks like and really reconcile yourself to it, then it takes a lot of the stress out.”
“This environment is also a great time to get outside your comfort zone,” he added. “In a way we’re all forced to do that, but when times are good and easy, we do what’s easy - so it’s time to get out there and do something that you perhaps normally wouldn’t do.”