Good HR procedures are a vital factor in what makes a boutique financial planning firm profitable.
The study found that robust human resources also play a role in making a business successful. This includes accurate job descriptions and key performance indicators (KPIs) for all staff that are clearly linked to achieving business goals.
Despite these fairly basic strategies, the study found more than 60 per cent of boutique firms do not have KPIs in place that can link staff costs and performance back to their business success.
The study found profitable boutique practices are 21 per cent more likely to believe that regular, formal business planning is critical for good practice management, and more than twice as likely to believe that reviewing their business performance each month is a necessity.
Head of Macquarie Practice Consulting, Liz McCarthy, said that during the GFC many planning firms had to divert attention from the strategic aspects of running their business, the impact of which is becoming evident.
“The reality of the past few years of financial market turbulence is that planners have been forced to focus more time and energy on looking after their existing clients,” said McCarthy.
“This has meant that looking at the strategy driving their business has had to take a back seat, as have paying attention to their HR practices, and the impact of this is evident.
“Our latest study showed a clear correlation between practices that are more profitable and those that placed greater emphasis on business planning, strategy development and overall performance reviews.”