Advice isn’t a product – Part 2

Advice isn’t a product.

Advice is far richer, deeper and more valuable.

At the heart of good financial advice is a on-going conversation that ignites life’s possibilities and helps realise their attainment.

Despite the banks alluring advertising, the value in the actual financial product is minimal when compared to the value of attaining much sought-for aspirations and objectives. Products can play an essential role, similar to the role of the jet engine on the wing transporting passengers to dream holidays. However the value of the jet engine doesn’t match the value each holiday-maker holds for their holiday.

Possibilities and aspirations are the guts of great advice. These aspirations are many and varied:  

  • the travel destinations that have long been in the back of mind as ‘somewhere always wanted to visit’;
  • the expansion of existing business into larger opportunities whilst controlling bigger risks;
  • the financial support for aging parents struggling to maintain proud independent living;
  • the protection of existing values and culture within an family business whilst respecting the diversity and ambition of the up-and-coming next generation;
  • the education fund for children or grandchildren that starts or continues an important family tradition;
  • the next step (or leap) from a current safe and predictable business career to one requiring more than just courage to overcome the untested, albeit exciting, new business opportunity;
  • the shift to a different life in destinations often visited, but actually starting a new life there has only been a vague hope;
  • the creation of a legacy in a community important to your family that aims to shift the circumstances of others less fortunate.

Advice is valuable for only one reason – its unique meaning to you. Abraham Maslow called it self-actualisation.

If we all had the time, the know-how, the expertise, the discipline, the habits and mindsets to achieve our financial aspirations, and we clearly knew what we needed (as opposed to what we might want), we probably wouldn’t need financial advice. We’d possibly accept the current financial product marketplace where we walk into the equivalent of the ‘financial product’ hardware store, we talk to the people there about the aspirations we hope for, then buy the appropriate financial  product, and hopefully hammer it altogether over a weekend or two.

But when today’s ‘financial hardware’ shoppers are told they are buying great ‘advice’, they understandably leave with different expectations than when they visit Bunnings and leave with a boot full of wooden shelves, some brackets and wall screws.

Today’s menu-driven approach to financial ‘advice’ compounds the confusion faced by Australians trying to understand the difference between financial advice and financial products. The approach dates back to the product origins of the industry rather than the professional future. Australians don’t purchase financial advice in a menu-driven manner as they might order meals in a restaurant. Professional advisers don’t use menus.

Professional advisers use their skills to understand the unmet aspirations of their clients, to uncover their unresolved financial complexities and to then impartially (i.e. non-conflicted) determine the path forward to best achieve greater financial certainty. Good advisory firms adopt a similar approach without conflict knowing that trust can’t be built any potential conflict is present.

Australians rightly judge the conflicts of interest in financial products and do not trust the current industry which claims to help Australians achieve aspirations but is really only selling products dressed up as advice.

Importantly, the overwhelming majority of advisers in Australia are great advisers who have to dance around the industry product origins and practices of the banks, industry funds and other product providers who don’t know how to provide and get paid for valuable advice.

Advice is not a product.

What do you reckon?


About Jim Stackpool

For nearly 30 years Jim has influenced, coached, and consulted to advisory firms across Australia. As founder of Certainty Advice Group, he leads a like-minded team of professional advisory firms seeking to create greater certainty for their clients. As an author, blogger, columnist, and keynote speaker, Jim is regularly called upon for his professional insights into the advice industry. His latest book Seeking Certainty is available now.

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