The changes recently announced by the Treasurer to capital gains, negative gearing and discretionary trusts will have most of your clients revisiting their current position, particularly those who are self-employed or business owners; some will be tempted to rush into immediate action, others will take the time to consider and consult with their adviser, and there will be some who haven’t yet realised that there will be any impact for them at all.
Of course, these changes have yet to be passed by Parliament, but the door is certainly being knocked, and irrespective of how it all plays out in the next 12-months or so, the opportunity is here now for every adviser – to communicate with clients, educate, reassure and reinforce your value.
Regarding your self-employed clients
- Three key findings (drawn from our client satisfaction survey database containing feedback from 60,000+ Australian advised clients);
- “Standard of Communication” is rated the second lowest, out of nine key service delivery areas.
- On average, one in six (17%) clients of Australian advice firms are self-employed, and they will definitely be interested in these announcements.
As the following chart clearly shows, self-employed clients rate harder and are less satisfied with their adviser’s performance across ALL service delivery areas.
Advice Clients – Overall Satisfaction by Occupation, Australian National CATScan Client Survey Results,
by Business Health Pty Ltd
The self-employed market segment, as attractive as it might seem, certainly comes with challenges!
Seizing the opportunity
If you are looking to acquire new clients and build referral partnerships, the recently announced economic changes are an ideal opportunity to raise your profile and demonstrate your expertise to your target audience.
A good place to start is with some form of explanatory and reassuring communication to your clients, backed up with the offer of a meeting to answer questions and discuss possible strategies going forward.
- When writing to your clients, explain what’s being proposed and how it could affect them personally. For self-employed clients, this is particularly important (note the graph above!).
- Host a webinar/seminar to overview the changes.
- Use the most commonly asked questions to create content for your website and socials.
- Put case studies on your website, blogs, vlogs, newsletters etc.
- Make yourself available as an expert commentator for radio, television, podcasts etc.
- Write a regular column for targeted trade publications or local newspapers.
- Contribute articles to your referral partners, for use with their self-employed/business clients and consider running joint webinars/seminars.
- Broaden your professional network to include a range of professional service providers (e.g. accountants, lawyers, general insurance brokers, lending/leasing suppliers). A strong professional network will be critical for attracting self-employed/business clients.
- Make contact with the associations in your local area that support small businesses (e.g. Chamber of Commerce, Council of Small Business Organisations Australia and local business networking groups).
- Incorporate the relevant economic reforms into your client reviews/progress-to-plan meetings – as an agenda item, not as a side topic.
Don’t be that plumber: know when to call for backup
If you’re an advice firm owner, you are in the same boat as your self-employed clients! What will these proposed changes mean for your business, if they are passed?
As reflected recently by Accru partners Tim Lane and Fiona Ettles to Professional Planner magazine Editor, Chris Dastoor, every advice practice should prepare ahead for its sale – even if a sale is not in the immediate plans – “The valuation of an asset at 1 July 2027 is going to be absolutely critical, because the difference in tax before and after is different”.
The two key takeouts from their article; get your business valued regularly and prepare an Information Memorandum to complement and support it. (Well worth a read – Advice business valuations ‘critical’ if CGT changes pass – Professional Planner).
Without a current business valuation;
- Owners are more likely to hold unrealistic expectations of value.
- Opportunities to optimise capital value are being missed.
- Beneficiary equalisation through effective estate planning is likely to be overlooked.
- Executing a sale under pressure is significantly more difficult.
A special note for solo/single-owner/own AFSL firms
Our recent research project focussed on solo/single owner/own AFSL firms* and how prepared they were if something unexpected should happen to the owner (What if…?) – we discovered that over half (56%) have never had their business formally valued – warning bells should be ringing if you fall into this category.
*For those who participated in this research – THANK YOU. A copy of the “What if…?” report has been delivered to your inbox. And for those who didn’t, a copy of the report is available for download <<here>>.