Read Good Walk Spoiled?
I reckon it’s a great book.
It’s about golf, but really a story about characters.
Characters under pressure.
That’s golf – either a casual hit or a classic test of character.
At the highest levels of the game, the classic tests can be agonising. As happened to Australian golfer Ian Baker-Finch.
He won the 1991 British Open at Royal Birkdale near Liverpool by two strokes.
It turned out to be a brutal result for him.
The years following his win have been referred to as the single worst slump in golf history, as he tried but failed to contest at the high levels again.
Worse, so dramatic and visible was his slide that everyone watching had their opinion for him. He became every golfer’s cryptic puzzle, a public case study of the “yips”. Like the song in our heads we keep hearing, the “yips” are the thoughts that distract us, that disrupt us, that niggle our beliefs and seem to ‘take over’.
It’s not only athletes at the top of their game that suffer the yips; they affect us all.
Many in the financial advice industry are currently suffering the yips.
There are lots of distractions, disruptions, niggles and change going on for financial advisers.
Some advisers are proposing High Court challenges (sorry paywall) to fight recent legislation blocking future on-going revenues. Other firms are facing substantial remediation fees. Floats are failing as sentiment changes, and technology bites enormous chunks out of former competitive advantages.
Amidst this noise and change, the fundamental yip question for every adviser remains the same.
Is what I do worth what I charge? Am I valuable? Will my clients continue to pay my fees?
The response to this question helps identify two distinct types of advisers.
The first type are the “justifiers”. They are easy to identify.
They’ll justify their fees based upon the effort and hours they worked on a job. They’ll justify their fees because they saved thousands in tax. They’ll justify their fee because their investments beat other returns. They’ll justify their fee because they got the loan, the insurance or another product when no-one else could.
And they’re right.
They are merely justifying their value comparatively. They base their value upon what they did or what they achieved compared to elsewhere.
The yips for the “justifiers” remain under control provided they continue to beat the alternative investment return, or they source a cheaper or better product, or continue to be paid well for hours worked while remaining competitive to fast-emerging alternatives.
Being “justifiers” doesn’t make them any less of an adviser.
However, their business model is forever at the mercy of their comparisons.
As night follows day, when value is fundamentally tied to the comparative offerings of others, the “justifiers” will eventually fall foul to others playing the same justifying game with comparable offerings. The “justifiers” will run out of money, unable to compete against inevitable price and technology wars.
The sad irony for the “justifiers” is they do offer real value, causing them more distraction, more frustration, more yips. But, they have never learned to price on their real value but comparable to another’s value, their valuable offer is left unsold on a crowded services shelf, or worse discounted where all roads become a treadmill.
The opposite to “justifiers” are the “differentiators”.
These “differentiators” don’t play the game of justifying fees by comparison to other offerings. They base their value on their innovation.
Innovation not only in their different approach with clients, their focus on specific advisory niches, the way they charge, but primarily in their offer to their clients.
While the products and services they offer are an essential consideration, they are not the basis for their value, unlike the “justifiers”. Their proposition is based upon how they help their clients innovate, develop, and shape better lives.
They differentiate for every client. They approach each client searching for uniqueness – both in value sought and complexities faced. They don’t assume client’s situations, circumstances or behaviours remain the same year after year, nor do they assume last year’s fees or value stay the same.
For the differentiators, every client has unique objectives, comes from different backgrounds, and needs to overcome distinct long-term situations or short-term circumstances. Each client’s financial yips hindering their own better financial lives are as unique and real as every client.
The differentiators are building advisory models knowing that their client’s yips won’t go away by themselves.
They must be worked through.
Unresolved, their yips will remain an unresolved complexity and worse a barrier to a life best lived.
The “justifiers” might have delivered the best tax saving or the ideal cash flow budget or identified a great share purchase, a cheap loan or the ultimate gem of an investment property.
However, we all get the yips. They make it harder to stick to an agreed savings budget because we always habitually over-spend.
They make it harder to negotiate critical financial decisions when the stakes are high and emotions strong, so we take the easier options, putting off the tough and crucial conversations hoping they’ll resolve themselves.
The yips lull us into a false hope that by continuing to do what we’ve always done will ensure our desires, dreams will be achieved, and our issues overcome.
That didn’t work for Ian Baker-Finch.
Unless our yips are worked on and managed, we are destined to be ruled by them.
The financial advice industry is full of advisers whose reason for joining the industry was to help others live their best possible financial lives.
Some advisers do this by selecting tax structures, investment products, and superannuation funds based up the relative cost and performance to others in the marketplace.
Some advisers do this by acting as the adviser minimising the gap between their client’s desired reality, and their current reality immersed and overrun with many options, issues, emotions, opinions and yips.
Whenever working with an adviser, never forget their primary job is to deliver the value you seek not only provide the services they offer.
What do you reckon?
Image Credit - Shutterstock_107531468
ABOUT JIM STACKPOOL
For 30 years Jim has influenced, coached, and consulted to accounting & financial advisory firms across Australia. His firm, Certainty Advice Group consults to accounting & advisory firms who separate financial advice from products. He has created Australia’s highest and only ACCC/IP Australia Certification Mark standard of comprehensive advice – Certainty Advice. He is also an author, blogger, and keynote speaker covering topics on his expertise – building advisory firms and pricing purely on transparent client value.