The Specialist
When the going gets complex, everyone seeks out the specialist.
Whether for our cars, our health, our relationships, our special morning coffee or our next choice of fly-fishing rods. Specialists make the really complex stuff simple.
Like the knee surgeon who fixed my bung knee a couple of years ago. He was a specialist on 50 year old plus knees attached to blokes who never listened to advice and jogged badly on hard surfaces for too long with little form.
Specialists are great at specific tasks or circumstances. And like my bung knee, once that job is done or that complexity handled, I don’t need the specialist anymore (and he doesn’t continue to charge me).
And there’s the rub for financial advisers who are seen as ‘specialists’
Once you’ve implemented the self-managed super fund, why do I pay you in subsequent years?
Once you’ve solved my complex web of tax structures, why do I pay you after that?
Once you’re placed the insurances, why do I pay you every year (to infinity and beyond)?
Here’s one to consider, once you’ve placed me in an investment portfolio that’s lost money, why am I continuing to pay you?
In the old days, when clients didn’t know better, specialists got to charge up-front for ‘doing their special stuff’ and then earn an “on-going” fee even when the client’s complexity (i.e. their need to see the specialist in the first place) has been removed. It’s a different matter when the client has on-going complexity, but like my knee surgeon who did such a great job that I can now run painlessly again, why do I need to pay him anymore.
Like good medical specialists, financial services will always need specialists across a myriad of areas of tax, structures, investment, insurances, debt, hybrid products, et al. But unlike the medical specialists, their waiting rooms and appointment books are full due to referrals from the general practitioners and their business models are predominantly ‘new business’ every day. Financial specialists on the other hand have enjoyed a consistent flow of business revenue each year as their appointment books are full of existing clients still paying following a complexity handled earlier in their lives.
Once the client perceives their complexity has been removed or managed, do they need to continually pay the specialist as most do today?
I’m not sure. It depends.
But if you’re a specialist, you’d better be very sure.
Specialists can make money – great money.
Specialists can earn (and deserve) premium fees over ‘non-specialists’.
But specialists rely upon referring colleagues otherwise their appointment books will look sparse.
There are some in financial services masquerading as specialists who are really suppliers, but there are also real specialists who aren’t as ready as they might need to be for the second, third and on-going years of queries from their clients who, once they perceive their complexity has been treated, might wonder what value is being added for the on-going fees being paid.
What do you think?