Louise and Mark live in Dandenong. She is a lawyer working at the local council, and he works for a sports promotion firm.
They were referred by a friend and client of one of my advice firms.
They are in their 40’s. Their jobs are thriving, their family lives are full, and their three teenage kids mean everything to them, despite the challenges and costs.
They began the advice conversation by saying they were wary of working with a financial adviser, as two previous attempts ended badly.
For them, the hype of ongoing value never materialised.
The plans they received were OK. But they just confirmed their thinking.
In both cases, they couldn’t see value in continuing the relationship for the proposed fees.
They’d heard from their friend that my advice team were different. As they were considering different options, they were interested in trying again.
I believe many Australians are thinking like Louise and Mark about the ongoing value of the advice fees they pay.
I read something in the Economist last week about Silicon Valley’s sudden obsession with the past.
Retro offices, retro phones, retro everything, built by the same billionaires who created the flood of information that is currently trying to drown us.
What stuck with me wasn’t the nostalgia.
It was the reason for it.
Even the people who built automation want a real conversation, undistracted, with someone actually paying attention to them as a person.
That used to be normal in financial advice too.
Before compulsory superannuation, ASIC, industry funds, investment platforms, the internet, before advice got carved into specialist products- tax, investment, super and risk specialities – there was a version of advice that looked more like a bank manager, or accountant, or impartial mentor that the family trusted for money advice.
Someone who started with an understanding of your life, not your product needs.
Here’s the single biggest differentiator I see between technical advisers and principal advisers today, and it isn’t qualifications, or fees, or even the advice itself.
It’s how they start and re-start the important conversations with their clients – regardless of whether there’s been a shift in the client’s circumstances or not.
The technical adviser opens with what they can do.
How much money do you have? What’s your income? What are your costs? What’s your structure? Who are the stakeholders?
All necessary.
The principal adviser opens somewhere else entirely.
Why does an advice relationship make sense for this client right now?
What’s actually going on in this person’s life that a spreadsheet won’t show.
To be clear, the industry needs both kinds of adviser.
Medicine needs GPs and specialists, and nobody thinks less of either.
The advice industry, however, isn’t anywhere near the maturity of the medical profession.
Advice is shaped far more by financial product, platform, and compliance paradigms than medicine is by the drug companies and hospital networks it works alongside.
Discovery, and re-discovery as life gets more complicated, is where principal advisers unlock the value.
Many advice teams misunderstand discovery conversations.
Technical advisers believe they are used for them to discover the technical circumstances of their clients.
Principal advisers believe they are crucial not only to understand the technical issues, but more importantly to create discoveries for their clients.
Client discoveries come from uncovering financial options, paths, and overt and covert complexities that clients either didn’t realise or couldn’t or were not ready to articulate.
Overt complexities, e.g. not enough time, are obvious but are rarely positioned, addressed or managed by advice teams.
The covert ones- a spouse quietly resentful about years of overspending, a couple, like Mark and Louise, caught in deepening debt and strain trying to keep up with their peer expectations, a single mum resigned to whatever pays her bills rather than reignite the hope of turning a hobby into a career- are at best discussed but usually ignored as being outside the comfortable technical boundaries of advice.
Principal advice takes a different kind of empathy, emotional intelligence, leadership, and no small amount of courage to explore and manage.
Principal advice for the technical, situational, circumstantial and behavioural aspects of every client is not the same as technical advice for the product, tax, structural, and investment issues alone.
I know the pushback.
I see it every day in the transcripts my team and I review for my advice teams.
Clients want what they believe advisers provide – a plan.
They don’t want a therapy session.
Fair.
But the skilled principal adviser respects the expectation while positioning the value of a different focus, and promises to cover every technical question the fact-find requires.
Principal advisers don’t make the numbers their first focus.
Sequence, not content, makes all the difference.
Mark and Louise engaged my advice firm.
They understood the differences from previous advisers in the first meeting.
Good principal advisers, regardless of technical qualification, demonstrate that difference in the first ten minutes of every important client conversation, on purpose, most of the time.
If the great bank managers of the past could sit in on most of today’s client meetings, would they recognise the advice profession?
What do you reckon?