Have you heard Nigel Marsh speak?
He is good.
His message was about navigating the constant white water generated during business growth by making small, impactful changes on purpose that are usually outside comfort zones and require more curiosity than caution to succeed.
This is his latest book – Smart, Stupid & Sixty.
His message was pertinent to the audience of advisers seeking more innovative paths to help their clients, grow their firms, earn sustainable returns, and reduce growth stress.
The advice industry could benefit from Marsh’s approach.
Particularly at present, as so many are just ‘too busy’ stuck in a seemingly perennial self-absorbed cycle, unable to discern the forests from their trees.
FOREST v TREES
The advice industry is suffering from a chronic lack of talent.
Reports abound of the exodus of advisers, the mountains of ridiculous regulatory paperwork and the frustrating uncertainty of FASEA implementation or Quality of Advice Review implementation.
Advisers can feel stuck on an uncontrollable hamster wheel.
Balancing their client’s best interests, their unknown compliance requirements, their search for limited talent, and the endless array of technology and systems demands while hoping for their own work/life balance.
Marsh would first ask, “what’s good about the current situation?”
There are lots at a high level in the ‘forest’ view.
The vast majority of clients are happy with the advice of their advisers. Not only are they satisfied, but their happiness also has more to do with the value of their advisory relationships than their advice products.
There is also a guaranteed demand for quality advice for years to come. The number of smarter adviser back-office services and apps is exploding, which will speed the evolution for better firms.
Marsh would then ask, “what can you learn from the current situation?”
This is when advisers divide into their paradigms.
I had a rant the other day from an American adviser who joined one of my sessions admonishing us for wasting his time, as the discussions did not, in his opinion, focus on delivering greater client value and certainty.
Whilst this guy was from a country where legislative boundaries surrounding advice delivery are weaker than sticky tape, he made a good point for those advisers who believe they are in the business of delivering advice.
However, the learnings are different for advisers with a different paradigm of growth from my American participant.
They believe that advisory firms of the future are not in the business of delivering advice. Rather, they are in the business of building a business that delivers advice.
The learnings for this group from today’s situation are many.
For instance, if client satisfaction and loyalty have more to do with quality advice relationships rather than stellar product performance, isn’t the future model of advice more about making relationships more prosperous, enduring, profitable and less dependent upon specific individuals?
Also, If demand is only going to grow, doesn’t the future model of advice mean greater selectivity, specialisation, and focus than the old model of client selection, which selected clients provided they had a heartbeat?
And possibly most importantly, considering the talent war, if client relationships are really the core for enduring future revenue streams, can these relationships be built, sustained and grown by future team members with greater client management, strategic and project skills than compliant technical skills?
Regardless of learnings, Marsh would then ask the third and most important question for anyone considering how best to grow.
How to make the best of the current situation?
The industry is at a nexus.
Marsh’s priority setting and making the ‘best of it’ becomes more demanding and critical.
Does making the best of it mean reducing the number of clients while increasing the value and fees for those that value their advisory relationships?
Does making the best of it mean selling clients that don’t value the advisory relationship as much as others?
Does making the best of it mean hiring on client management skills when product technical skills are so much harder to find?
Does making the best of it mean significantly raising fees at a time when the narrative in the marketplace is about making advice more affordable?
Does making the best of it mean some past promises to past clients, long-serving team members, or even business partners need to be re-addressed?
Does making the best of it mean better-enforced priorities rather than more searches for different systems with big hopes to patch growing gaps in business models beyond their use-by dates?
No industry ever solves its capacity challenges.
But they are almost impossible to manage without addressing a more significant issue – the vision challenge.
Today’s challenges will remain without a different vision built upon what is working.
The vision challenge is committing to different priorities.
Marsh would say this requires new courage, a solid trust in the initial reasons why most advisers become advisers, and progress needs to be explored with a great curiosity of what’s possible rather than full of a cautionary attitude of being ‘too busy’.
These are the best of times to build better advice firms.
What do you reckon?
Photo credit: iStock_1266251076
ABOUT JIM STACKPOOL
For over 30 years, Jim has influenced, coached, and consulted financial advisory firms across Australia. His firm, Certainty Advice Group, skills advisory teams delivering comprehensive advice, where fees are priced purely on the value and impact for each client. He obtained Australia’s only Certification Mark for comprehensive, unconflicted financial advice – Certainty Advice. He has authored four books on advice, with his latest – What Price Value – released in 2022.