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How do Financial Advisers shake off their poor image? Better still, how can we turn the negative past into an exciting, positive future?
It’s going to be difficult. We’re going to have to change our language.
Someone I have immense respect for recently tweeted the following:
“A clear & consistent message from everyone in our industry is essential for consumers taking the next step in planning their financial future”
Aaargh! Why, why, why do we keep using this word? Industry?
If we claim to be building a profession, if we keep using the word ‘Industry’ we have NO chance!
Dictionary definition:
Industry: Economic activity concerned with the processing of raw materials and manufacture of goods
Profession: A paid occupation, esp. one that involves prolonged training and a formal qualification.
Can you see the difference?
The financial services ‘Industry’ got Financial Advisers into the mess we’re in. The ‘Industry’ is to blame.
The ‘Industry’ consists of Product Providers and Investment Houses producing mostly unnecessary and expensive financial products that the majority of people do not need or want. Mis-selling scandal after mis-selling scandal has resulted – thanks to the big budget and persuasive power of the ‘Industry’. And Advisers pay the price.
Post RDR, the ‘Industry’ will continue to manufacture ‘products’ that still require Advisers to go out and distribute on ITs behalf. (It used to be called ‘sell’, now its called ‘distribute’ – same end result).
These big boys (Providers, Investment Houses) will continue to make vast sums of money off these products. Always have. Always will. Advisers won’t.
The ‘Industry’ has a powerful ally: the ‘trade’ press. Financial porn – including the likes of the pinks and New Model Adviser – all happily making vast sums of money advertising the ‘Industry’ shite. THEY don’t want you to stop focusing on products!
Worse though, Advisers fall prey to the marketing methods and ‘sponsorships’ and free lunches intended to keep them focused on the distribution of the ‘Industry’s’ products. Many Advisers don’t even realise they’re falling for it. It’s what they’ve always done.
“Ah, but it’s all changing!” I hear you scream!
Early days yet, but post RDR, Advisers are STILL falling prey.
But the tactics have changed.
The ‘Industry’ now makes Advisers think they’re smart. Advisers now think they’re getting some of the ‘Industry’ margin. With commission removed – and egged on by guess who – they’re highly motivated to get AUM at all costs so they can make their slice.
And so the story goes… “Get all your clients assets onto a wrap, build in your 1% pa and Bob’s your Uncle, Fanny’s your Aunt”
Advisers haven’t changed what they actually DO. Only the way they’re paid.
With RDR, all that many Advisers are doing is just changing the way they’re paid. It used to be paid all up front. Now it’s on the drip.
So, the next big mis-selling scandal beckons… It’s just a matter of time. And Advisers will once again get it in the neck.
But the ‘Industry’ is really smart. Guess who keeps the risk?
Yep. You’ve got it. Advisers. Brilliant! Once again the ‘Industry’ gets what IT wants. It always will.
What worked in the past, won’t work in the future.
In the past, the ‘Industry’ provided a regular supply of ‘new’ products, new allocation rates, new funds, blah, blah, blah, which conveniently gave Advisers something to talk about – and it worked. Whatever ‘service’ Advisers offered, in the past, no matter how good – or how bad – clients were probably happy with it – because they thought it was free.
But now that’s all changing. The odd newsletter, the odd switch and a cup of tea ain’t worth 1% pa.
The simple fact is this, Advisers who think they’ll make money from accumulating AUM are deluded. They won’t. Adding an extra layer of costs for meddling with the money is not going to work long term, not in a world of slippy money.
So why waste the next few years getting sucked down that route?
The only way to make money and secure your future post RDR is by KEEPING assets under management.
And to keep assets under management – to KEEP getting paid – you need to provide a ‘SERVICE’ that’s worth paying for.
The winners in the future will be those who KEEP the AUM – and, better still, attract the AUM of other Adviser firms – by delivering PROPER financial planning.
But here’s the best bit: you make more money, feel good about yourself and get more respect when you deliver CLIENT FOCUSED financial planning.
So, what do you want to be part of? An Industry or a Profession?
Financial Planning, done properly, is a demonstratable, repeatable, compelling, client focused advice process that does not revolve around the distribution or sale of any form of financial product. It focuses totally on the client and on what THEY want, NOT on what the Financial Services ‘Industry’ wants. And that’s the difference.
But Financial Planning doesn’t sell itself. You need to communicate it and deliver it in a COMPELLING way. Otherwise clients just say “Er, can you just sort out my ISA?”.
We have an advantage over other professions!
Here’s the great news! Compared to other ‘professionals’ – like solicitors or accountants – we have one massive advantage. We know how to SELL.
Armed with the people skills, the sales skills, the communication skills that most decent Advisers have in abundance, the promotion and delivery of PROPER, engaging, compelling Financial Planning is a cinch. All you need is the right words, the right tools and the right mindset.
The future is immensely exciting for PROPER financial planners who go out there and DELIVER the goods. Do that day in and day out and YOU will clean up. Promise.
Success in life comes from doing the opposite to what everyone else is doing. Say NO to free lunches!
So, the next time you go to an ‘Industry’ event, just stand back a little, and have some fun. See the illusion that is Financial Services. See the ‘sponsors’. See the free lunches. See the free pens and free umbrellas. More importantly, see how the ‘Industry’ works its magic on gullible Advisers who think their shite matters.
See it! Laugh at it! And then set about turning this to your advantage. (I can show you how 🙂 )
So what do you think?
What do YOU stand for? Industry or Profession?
It’s time to step up to the mark. We’ve got just one chance to make a proper profession. If we call ourselves Financial Planners let’s make sure we actually deliver Financial Planning! Better still, let’s remove the word ‘industry’ from our vocabulary – before it’s too late!
Break the shackles of ‘Industry’ influence and your world changes! 🙂
Please leave your comments below. Let me know I’m not alone on this!