I love flying.
Long flights, short trips, big planes, tiny ones, hang-gliders, choppers.
When I was a kid, Dad would sometimes drive out to a small park on the Cooks River which bordered Mascot airport to watch the arrivals and departures.
From there you felt the roar of the take offs, saw the puffs of rubber smoke clouds from screeching landing gear and smelt the kerosene-like Jet-A1. Nothing like being there. Seeing and feeling it live. One of my best apps is still FlightRadar24, full of details for a plane-spotting nerd.
Financial advisers enjoy details too.
Unfortunately, it is often the wrong details.
As USA markets touch highs, as interest rates hover at record lows, as deficits seem to matter less than printing money for pandemic-stricken global economies, the details most financial advisers are focussed upon are the fund balances of their clients.
This is logical as financial advice over the last thirty years has been primarily about superannuation or investment funds. But when Covid-19 is combined with FASEA’s impending regulatory revolution, the exit of institutional advice providers (i.e. the banks), and the boom in tech, the pandemic is acting as an accelerant of an impending inconvenient truth.
The details are changing for advisers.
And judging by the rather un-extraordinary responses most financial advisers are having in these most extraordinary times, those advisers hoping to thrive in the fast-evolving future of financial advice have some choices to make.
Where do they want to make their impact and what details will they build their expertise in?
In the balances of client’s funds being an expert managing client’s money. Or being an expert in forging best possible financial paths with advice and planning to navigate the complexities clients face as they try to achieve the outcomes they seek.
Many firms have oversold their ability to do both believing this expertise is one and the same thing.
The inconvenient truth is they are not the same.
Trying to do both will continue to create spectacular clashes of mission statements and day-to-day cultures. Despite the numbers of good people working within many organisations still believing both skills can be combined, the reality has been when brands sell trust but profits come from product sales there is an unacceptable turnover of departing Chairs and CEOs.
Regardless how product-profits are disguised behind advice propositions with labels such as “independent” or “fees-for-service” or “flat retainer fees”, the fundamental differentiating detail will be the product advice firms who make their profits based upon product sales and the financial advice firms that make their profits based upon the valued management and progression along unique financial paths for each client every year.
Helping more Australians to understand this detail, will do more to advance valuable advice for more Australians than has been achieved by the product-centric advice industry over the last thirty years.
Details matter not just to plane-spotting nerds.
What do you reckon?
ABOUT JIM STACKPOOL
For over 30 years Jim has influenced, coached, and consulted to advisory firms across Australia. His firm, Certainty Advice Group supports a growing community of advisory firms delivering comprehensive, unconflicted advice, priced on value provided. The community of advisory firms align with Australia’s highest and only ACCC/IP Australia Certification Mark standard of comprehensive, unconflicted advice – Certainty Advice. He is also an author and keynote speaker.