Some financial advisers are searching for a new value proposition as one might search for a lost set of car keys.
Others are searching for their value proposition as a golfer frustratingly tries to regain their former groove and rhythm when their swing was smoother, more consistent and the handicap was lower.
Fascinatingly still today, there are other advisers content to sit back on old, ‘proven’ value propositions and wait for the certainty the pre-2008 marketplace provided them.
Tragically there are other advisers whose focus isn’t preparing a new value proposition at all. Their future focus isn’t their advice clients. Their search is for a ‘product’ partner who’ll pay them to join, or stay. These advisers aren’t building advisory firms, they are building financial product franchises similar to a Toyota dealership. That’s an OK model, provided nothing is being hidden from the client that inevitably affects the financial advice.
The financial advice value proposition of the future isn’t a former one that’s been lost.
It isn’t the pre-2008 proposition just waiting for former conditions to return.
It’s a proposition that has to work against the paradigms, the conversations, the understandings and the traditions of the pre-2008 environment where the drivers of the majority of propositions were financial products.
The best analogy I know is the medical field (though it’s not a perfect one).
The pharmaceutical industry and medical profession are closely aligned. They are, however, different and most people can understand the differences.
But most people do not understand the huge differences between the current financial product industry and the emerging financial advice profession.
The financial product industry is huge, powerful, ubiquitous, and touches most people in the first and second world. Their brand names are attached to the tallest buildings in most global cities. They are as essential to our economies as utility companies, hospitals, and transportation systems.
But they are as separate and different to the financial advice profession as the medical profession is as separate and different to the pharmaceutical industry.
The opportunities are as huge as the threats for the emerging financial advice profession.
The new value proposition for financial advisers requires challenging the old assumptions, the old perceptions, the old thinking, the old regulations, the old practices IF we are trying to build a successful, sustainable financial advisory firm for the future.
The new value proposition requires no product-related income that influences advice. Yes, I’m a fan of APES230
The new value proposition requires a total and compliant focus on achieving long term financial outcomes for clients.
The new value proposition means that we have to stop forcing new advisers to repeat the careers of old advisers.
The new value proposition needs to respect but sideline the influences from product manufacturers on how best to build advice firms.
The new value proposition requires courage.
The new value proposition is needed more than ever right now.
What do you reckon?
Photo Credit: www.sproutdaily.com
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.