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It was an ordinary Wednesday evening. In my house, this tends to be the quietest evening of the week. Charlotte usually hasn’t got a sport or social club to rush out to, Cassie or I don’t usually have anything on in the evening and so Wednesdays are an evening where we get the chance to sit down, as a family, and talk whist eating our dinner.
On this particular Wednesday we were talking about my youngest daughter Sophie’s latest obsession…Peppa Pig. If you haven’t got kids of a certain age it’s probably not a show you’re aware of.
However Peppa, George, Mummy and Daddy are BIG business. I’d read recently that merchandise from Peppa Pig exceeded £200 million in the UK alone in 2010 and as I found this fact incredible I mentioned it during our dinner.
Cassie laughed….”You’re so critical sometimes….it’s just a kids show. Just let it be a kids show!”
This comment, although Cassie wouldn’t have known it at the time, was just a tad hurtful. I try to be a positive, trusting and forward thinking person. It therefore quite interesting that Cassie considered me to have a critical attitude and as someone who’s opinion I love, trust and respect I suspect that to a certain extent, she’s right!
But then this got me thinking. Is having the ability to think critically required when providing financial advice? and does being a critical thinker make us better financial planners?
I believe that it is fundamentally important to be a critical thinker in life, but in our business it’s absolutely vital. Let me explain why…
We all know (especially if we run businesses) that marketing is important. We all market our respective businesses, our services, or just market ourselves as individuals.
We are also marketed to consistently. Pick up any trade paper, visit any conference or even do something as simple as open the post in your office it’s likely you’re being marketed to.
Also financial institutions, product providers and fund managers are on the whole pretty good at marketing their products and services in a range of different ways including online, paper based and in person via their army of broker consultants.
Now It would be hypocritical of me to suggest that these companies shouldn’t market their products and services. These firms have as much right to market as any business.
However surely it’s our responsibility as financial planners to act in the best interests of our clients and instead of taking notice of the any of the various marketing messages, a better approach would be to use the tools available to us to conduct completely impartial analysis based on the range of options available.
Now, I’m sure you take this approach anyway. …
However if everyone in the advisory community was already taking this approach you could potentially see a change in the way life companies, product providers and fund managers behave.
I’m sure, if provider marketing didn’t work, you’d see companies looking at improving their service, reducing fund and product charges to become more competitive instead of spending more money on marketing their products. Surely this has huge potential benefits for both us (as advisers) and our clients.
I’d suggest that the reality is that there are some advisers out there who have their ‘favorite’ products, funds and companies and will be guided to make recommendations based on emotion instead of robust analysis.
It’s not that I don’t believe that emotion isn’t a core part of what we do. It is. Many of us build relationships with our clients on an deep emotional level.
However I’d also suggest that to ensure we provide our clients with the best service we need to be purely logical and analytic when it comes to selecting both products and funds.
This does mean we need to ignore the marketing hype, ask incisive questions on what we’re told by product providers and fund managers and conduct unbiased research to test these claims. Our clients don’t expect anything less….and if this means that as a profession (and as an individual) I’m a critic…I’m happy to be labelled a critic!