What’s appealing about Elon Musk?
His car company defies market logic with valuations of 4x revenue while companies far more established and experienced clamour for valuations at fractions of their revenue (see Prof Galloway). His space exploits are creating global headlines like a new Neil Armstrong.
It might be something about his ‘narrative‘.
Supposedly, the 48 year old Musk not only builds good product, his brands also attract people who are interested to “..change the world and help humanity” – his purchasers are not just buying cars it seems, but buying into something bigger – the future of humanity.
The future – that is what financial advice is all about.
Unfortunately there is not much appeal about the topic of financial advice. By itself, a visit to an adviser is akin a trip to the dentist – a necessary chore and hopefully not too painful.
The common narrative of financial advice is one of disconnection thanks in large to the industry’s pioneers, the financial giants.
Most financial product manufacturers have long promised optimism and opportunity in the nebulous marketplace of long term propositions. In this marketplace sellers don’t have to work too hard on short-term value. So rather than making money by building world-class financial advice capabilities, the giants have become giants by playing with the percentages in their client’s money, well aware their revenues were locked in thanks to the fine print in their pension, insurance, banking or credit products.
So despite twenty years of compulsory pensions and a significant scandal or enquiry every couple of years, financial advice has never become appealing.
New Advice Narratives
One thing is for sure.
As long as the giants continue to ‘control the narrative’ about financial advice, any new narrative will unlikely come from them. The way the giants grow and are remunerated – by market share – effectively means they are paid not to understand the need for any different narrative. Musk knew he couldn’t build a car company using the existing narrative as Steve Jobs did not build Apple Music on the traditional music industry.
There are lots of up-and-coming advisory firms having a crack at new ‘narratives’, but end up with a description of differentiation. Their websites feature labels of being life-centred, or exchange-traded-fund specialists, or aged care specialists, or retiree experts, or independent, or fee-only, or self-licensed, or ‘for members’. These are differentiators rather than narratives.
Musk’s narrative evokes an enduring or even profound value for clients which is difficult to achieve via differentiating on existing narratives. Strong narratives change perceptions, create services built upon a conscience that aligns the firm’s culture and clients while engaging with clients beyond any technical capability.
Thankfully, nature abhors a vacuum. Today’s crisis of confidence – Covid-19 – is the opportunity for new narratives in financial advice. Don’t waste it.
What do you reckon?
Photo credit: www.spacex.com
ABOUT JIM STACKPOOL
For over 30 years Jim has influenced, coached, and consulted to advisory firms across Australia. His firm, Certainty Advice Group specialises in building advice firms who charge flat fees for comprehensive, unconflicted advice. He is growing a community of advisory firms who align with Australia’s highest and only ACCC/IP Australia Certification Mark standard of comprehensive, unconflicted advice – Certainty Advice. He is also an author, blogger, and keynote speaker.