Advice entrepreneurs in action: modular advice

Modular advice: Giving clients what they want

The demand for modular or limited advice is strong. Whether it’s for younger clients with fewer complex problems to solve, or DIY investors who need guidance or specialist help from time to time, there’s a large and growing group of clients who would happily pay for expert help, if they could only access it in a modular form.

These days, we’re seeing newer advice businesses take a much more market-driven approach, offering clients the opportunity to access expert advice on specific topics such as superannuation or investing. These topics can often be explored in discrete modules with their own challenges and solutions. One business that offers advice in this way is Finnacle Pty Ltd (ABN 47 621 162 678) (Finnacle).

Case study: Market listening

Prashant Nagarajan and his partner had a singular vision when starting their business, Finnacle, which was to make advice affordable and accessible to young Australians.

Every aspect of the business has been designed to accommodate this vision. Before they even opened their doors to clients (or ‘members’ as they call them), the Finnacle team had conducted three months of extensive market research – using paid surveys and client focus groups – to listen to what this target market wanted. This ‘proof of concept‘ stage proved crucial in the creation of a sustainable offering for an underserved market.

The end result is an online-only practice through which members can access personal advice on demand in a progressive, modular fashion.

The modular approach

Members subscribe to either an Essentials package for $199 per month, or the Advanced package for $299 per month, according to the number of financial goals they’re looking to address. Over the course of a year, members will access modules progressively, with each module broken down into steps including situational diagnosis, plans of action and implementation. Each module has its own needs analysis, allowing targeted solutions to be delivered across a broad range of typical client situations. As an example, saving for a home deposit is one module, with a later module devoted to applying for a first mortgage.

Recognising the ceiling on what their target clients were willing and able to pay for advice, Finnacle set about building a model that could support that level of pricing. Limiting face-to-face engagement strictly to Zoom calls has substantially minimised overheads, and their just-in-time approach to administrative resourcing (a concept borrowed from the motor vehicle industry) sees them outsource administrative work to a team of virtual assistants. This allows support to be dialled up or down – and paid for – according to need.

What differentiates the model further is its focus on step-by-step financial management. “Rather than the entire advice relationship being centred on one upfront discovery and SOA process, Finnacle members effectively tackle their issues one step at a time, which helps them learn, helps them build confidence and helps them build trust in the value of advice,” said Nagarajan.

Growth and success

Finnacle is already reaping the rewards of their approach, with the team tracking currently towards 75–100% revenue growth year on year.

Word of mouth has been a driving force behind this growth. For every active member of the program, they average three referrals a year. Of those three, an average of two a year convert to paying members themselves.

According to Nagarajan, his licensee has also been extremely supportive, recognising the compliance rigour inherent in the individual steps in each module.

“From their perspective, the underlying principles of quality, compliant advice are all there, it’s just old wine in a new bottle”. Prashant Nagarajan Finnacle “Rather than the entire advice relationship being centred on one upfront discovery and SOA process, Finnacle members effectively tackle their issues one step at a time”

Find out more

Innovation isn’t new but the way advice entrepreneurs look at common challenges provides fresh perspectives on how they do business. By shifting their focus to the client and approaching key facets of advice in innovative ways, they are making their business more efficient while driving better client outcomes.

To read more, download our paper, ‘How advice entrepreneurs are delivering cost-effective advice to more Australians.’ or check out our podcast series.

DISCLAIMER – IMPORTANT INFORMATION

This series has been issued jointly by HUB24 Custodial Services Ltd (ABN 94 073 633 664, AFSL 239 122 (HUB24) and XY Adviser Pty Ltd (ACN 45 606 168 781) (XY Adviser) and is current at the date of issue. HUB24 is the operator of HUB24 Invest (an investor directed portfolio service), promoter and service provider of HUB24 Super which is a regulated superannuation fund. The trustee and issuer of interests in HUB24 Super is HTFS Nominees Pty Limited (ABN 78 000 880 553, AFSL 232500, RSE L0003216). XY Adviser operates a professional network for financial advisers.

The information in this document is intended to be general information only and not financial product advice. The views expressed in this document by persons who are not representatives of either HUB24 or XY Adviser are their own, and do not necessarily represent HUB24 of XY Adviser’s views.

Neither HUB24 nor XY Adviser have validated or verified the views expressed in this paper, make any representation as to the completeness or reliability of the material in this series, accept any liability for loss attributable to use of this paper, including liability for any statements which are incorrect or misleading. Readers should not rely on the information in this paper and should undertake their own investigations and use their own commercial judgment. This document must not be copied or reproduced without the prior written consent of HUB24. © HUB24