3 Business Critical Take Aways From 2025

2025 is nearly in the bank. Here are my observations on the year that was. 

1. Views on AI

3 years ago, I was a little paranoid about the effects of AI (and I’m pretty sure I wasn’t alone). 

Today?

As one of my Uncover Your Business Potential clients often says to me, “AI is like the internet” – in terms of the impact it’s going to have on the world we live in. 

I get it. 

But is it going to end your career? I don’t think so. Not if you’re good anyway. 

Matt Sonnen from Coldstream Wealth Management dropped a line from a Michael Kitces’ presentation, which was made at Future Proof (a funky conference held in California where 4,000 people wear shorts).

Apparently, Michael made the point: 

• If you are using AI to help more small clients, you’re losing 
• If you are using AI to do more for your big clients, you’re winning

I’m on board with this line of thought. 

If you’re building an AI-focused business model to serve smaller clients (the blue ocean) that’s smart. However, if your core market is wealthier clients and you’re developing an AI offering to keep your smaller clients, maybe not so smart. 

They are two completely different businesses. Focus on one or the other. 

And for those who are continuing to serve their wealthier clients, Matt quoted this stat from a Fidelity white paper from 2023:

USD$9,222 – this is the average cost to serve a client. 

Matt’s point to US advisers – just remember this when you are serving clients paying less than that. The barrier to profitability is higher than you think. 

I dare say the same principle is true in other developed financial planning markets as well.

2. Growth Is The Key To Everything

Here’s some sobering data from SEI in the US:

• 70% of growth in the last decade came from the market. (i.e. growing AUM)

• 30% came from true organic growth (i.e. growth after you strip out the effects of the market) 

• But get this –  only 6% of firms generated 76% of the 30%

• So 94% of firms experienced minimal organic growth.

It’s vital to start measuring your true organic growth rate. Strip out market movements and measure the net inflow of new AUM or new fees (after withdrawals). That gives you a much better indication of the health of your business. 

One of my Uncover Your Business Potential delegates did exactly this exercise recently and was shocked to see the level of decline in their level of assets under management, hidden underneath market growth. They have identified an issue that, left unaddressed, could have become a crisis three years down the road.

Growth, Growth, Growth

Regardless of whether you are staying, selling or creating internal succession, growth is the key to everything. 

Why?

It creates opportunities for your team, which allows you to attract and retain talent. A small firm that’s not growing is really going to struggle in the war for talent.

Paradoxically, the key to growth is not chasing growth. 

Rather, it’s about focusing on laying foundations. Stronger foundations create a business that can continue to grow year on year on year. 

Amazing growth is sustainable, repeatable growth – and it’s the compounding effect that provides the real magic.

“To say that the purpose of business is to make a profit is like saying that the purpose of life is to breathe.”
Paraphrasing Peter Drucker

Getting your business structure right is vital for growth

In my white paper How To Solve The Scale Problem (In financial planning businesses) I offered an alternative structure for growth to that adopted by most firms.

Instead of having all advisers take 15 years to grow their own client bank (super slow), why not identify advisers who are best suited to two different roles:

• Servicing advisers – servicing an existing batch of clients and associated revenue
• New business advisers – who only focus on seeing brand new prospective clients and bringing them on board.

I had a conversation with a business where they have four existing advisers. When I asked if there was a natural split of skills between servicing and new business, it turned out there was. It just so happened that two advisers were predisposed to the servicing adviser role and two were well-suited to the new business adviser role.

My suggestion:

a. Batch up a bunch of clients generating maybe £800,000 – £1M of annual revenue per servicing adviser. Surround each adviser with a team that allows them to simply see clients. These are uber-productive servicing advisers.

How much could they be paid in that role?

If you paid them £200,000 a year, you are still only paying away 20% – 25% of gross revenue.

Will it be a difficult conversation to get two advisers interested in this role? Will they feel like they’ve been sidelined and had their career stymied?

I don’t think so.

b. Let the other two advisers focus exclusively on new business. Now, for this role, I need to make some assumptions:

• For each adviser, the firm can generate 50 – 70 new on-target leads per year (it’s a decent-sized firm)
• The average planning fee is… £2,500
• The average implementation fee is… £5,000
• The average ongoing fee is… £8,000
• In Yr 1: 50 clients x £7,500 Planning and implementation fee = £375,000
• In Yr 2: 50 clients x £8,000 = £400,000 in ongoing fees, plus we have another 50 clients generating £375,000.

How much could they be paid in that role?

If you paid them £200,000 – £250,000 a year, you are still only paying away about a third of revenue (from year 2 onwards).

Will it be a difficult conversation to get two advisers interested in this role?

I don’t think so.

Would these two moves create a much faster growth firm? You bet.

For some recommended reading on why speed matters (even in a boring old financial planning business), check out this book An Ode To Speed: Why a focus on cost makes organisations weaker, less profitable, and less competitive by Justin Roff-Marsh. He explains it better than I ever could, and it’ll take you an hour or so to read. It’s short.

3. Succession Planning

I picked up some great sound bites from Philip Palaveev of The Ensemble Practice at his Insider’s Forum session in New Orleans in September. Here are some snippets.

Philip described a roundtable session he attended on succession, which saw a founder get up and speak eloquently about how the business was their masterpiece, their work of art, that they wanted to see preserved.

People applauded and saw the beauty in their speech.

But then a successor stood up and said ‘No’. Our job is not to curate the founders’ art and preserve it like it’s a museum piece. We want to keep painting and add to it.

And that’s succession in a nutshell.

Are we preserving the founders’ Art? Or are the successors still wanting to paint and add to the picture?

Clearly, it’s got to be the latter.

Some questions to consider;

• Who will be the steward of your client relationships (after the founder/s depart)?
• Who will be the client’s new adviser?
• What happens to your team?
• Who will wave the flag? Who will grow your firm and create opportunities?
• Who will invest the capital the business needs?

Philip said, we haven’t been great at growing businesses. We need to teach our second generation (G2) successors how to grow businesses. Growth is essential for succession.

At FP Advance, that’s why we launched our new High-Performance Programme (HPP) in June 2025. It focuses on two key aspects of preparing G2 for ownership/leadership:

Like our Uncover Your Business Potential programme, it runs over 3 years, but in this case, there are two coaching days each quarter (not one), a leadership skills track and a selling skills track.

A large number of firms within our ever-growing Uncover Your Business Potential community don’t want to sell to a consolidator. They want internal successors to be able to continue the work of the business.

Later at the Insiders Forum, I was able to have a quick sit-down with Tim Kochis from Kochis Global, and one of the original founders of Aspiriant.

He flagged the issue that often comes up in succession discussions – “I can’t afford to buy 51% so I won’t buy.” In Tim’s view, this is a big mistake.

His advice?

You’ve got to separate the management transition from the ownership (financial) transition:

• Deal with new corporate governance separately
• Deal with the financial transition separately

In his view, they are not connected, and if you do connect them, you’ll never resolve the issues.

It’s fine to sell down chunks of the business a bit at a time. Forget the idea of having to own 51% from the get-go if it is unaffordable.

One large US firm I know used to have a few major shareholders, but now there is only 1 person who owns a 15% chunk, and 80 new shareholders own the rest. That’s been achieved over a medium to long-term horizon, but the business is in great shape for the future as a result.

And here’s a great example of that approach in action here in the UK.

Philip’s Advice to G2

Philip had some great advice for potential G2 owners:

“A business is much more like a sports team (or a theatre company) – the control and leadership are distributed. There is a coach and a director, but if you are the best player, if you are the best teammate, if you are the best scorer or the best singer, you will play in every game and have a part in every play.”

Ownership is complicated:

• Michelangelo did not own the Sistine Chapel
• Michael Jordan did not own any shares in the Chicago Bulls
• Frank Lloyd Wright owned only two houses
• Irving Berlin sold the rights to White Christmas
• Banksy does not own his own murals
• Van Gogh owned a lot of his paintings, but died in poverty

I loved that analogy.

And I’ll leave you with this…

A bunch of people in a lift is called a group. A bunch of people stuck in a lift is called a team. What makes the difference? The presence of a common goal.

📚 More Recommended Reading:

Here are a few books I really enjoyed this year:

1. Reset: How To Change What’s Not Working by Dan Heath
2. Humanocracy: Creating Organisations As Amazing As the People Inside Them by Gary Hamel (buy the updated and expanded edition)
3. 10X Is Easier Than 2X: How World Class Entrepreneurs Achieve More By Doing Less by Dan Sullivan and Dr Benjamin Hardy

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