The hidden cost of doing every piece of client work in-house

Financial advisers spend their working lives telling clients that long-term plans need regular reviews. Apparently, business owners are rather less enthusiastic about taking their own advice.

Research from business advisory and accountancy firm Menzies LLP found that 55 per cent of UK businesses don’t have a strategy covering five years or more that they review regularly. Another 15 per cent are essentially making it up as they go along, relying on short-term reactions instead of structured planning, while 7 per cent of leaders couldn’t remember when their last formal strategy session took place. Presumably it was memorable for everyone else.

The findings come from a survey of 500 senior business leaders and aren’t broken down far enough to show how advice firms compare. Even so, anyone who has begun January determined to write a business plan, then resurfaced in October wondering where the year went, may recognise the problem. Most firms have plenty of ambition; it’s usually stored safely in a document nobody has opened since the away day.

Client demands, regulatory changes and daily firefighting can make strategic planning feel like something to tackle when business becomes quieter. The firm is busy, revenue is coming in and everybody appears fully occupied, which can look reassuring until somebody asks where all that activity is supposed to lead. Without a clear direction, another year of urgent cases can quietly make the important decisions on the owner’s behalf.

A plan should survive contact with reality

Only 38 per cent of businesses regularly challenge their strategy through scenario modelling or ‘wargaming’. Just under a third, 32 per cent, have their plans reviewed by an external adviser such as an investor, bank or non-executive director. Scenario planning may sound theatrical, but it remains preferable to discovering the firm’s strategy in real time during a crisis.

Oliver Finch, partner at Menzies, said: “In today's environment, many firms are drifting towards short-term planning because it feels more practical.

“But without a longer-term strategic lens, businesses risk driving in the rear-view mirror – losing direction, growth and the very agility they need to build in to be able to adapt today.”

His proposed answer is a hybrid approach: establish a clear long-term direction, then test, review and adapt it regularly. For an advice firm, that means deciding what sort of business you’re trying to build before workload, recruitment problems and the next regulatory deadline decide for you.

Does the firm want more clients or deeper relationships with those it already has? Will growth come through recruitment, acquisition or better use of external support? Which tasks genuinely require an adviser, and which are consuming expensive hours because the process has never been questioned? These aren’t matters to squeeze into the final 20 minutes of a management meeting after compliance, recruitment and the broken printer.

The usual obstacle isn’t a shortage of ambition. It’s finding enough time away from client work to think properly about the firm. The Timebank’s paraplanners can take on the research, technical analysis and suitability reports that keep filling the week, leaving you more room to work on the business rather than remaining permanently trapped inside it.

You already know the value of a long-term plan. Your clients have the paperwork to prove it. It might be reasonable for the firm to have one too.