I love Netflix.
I understand why their shows have earned more Oscar nominations in recent times than all other studios combined.
Considering how they have grown from just another DVD rental service to become the world’s largest creator and streamer of quality entertainment despite the dominance of the existing studios and huge tech groups, is phenomenal.
However, over the last six months, Netflix has ‘lost’ about 70% of its value – $USD215B worth.
The cause?
The market is learning that many subscribers are actually not paying anything. Another surprise is the prediction that streaming services may be approaching a saturation point.
It’s interesting times ahead for streaming platforms.
No matter who you are, or what you have achieved, confidence comes and goes.
No one is immune from the highs and lows.
CONFIDENCE
The blood running through the veins of an ideal advice relationship is confidence.
It is the foundation of all client progress.
For some clients, owning the ‘right’ product (e.g. a superannuation fund with the lowest fees) gives them confidence.
For others, having control over their retirement destiny (such as having a self-managed superannuation fund) provides them confidence.
Some find confidence in their financial lives because they own an investment property.
For others, confidence comes from the house they own, or their boat, their new bike, their holiday destinations, the schools they send their kids to, the car they drive or their work title.
For many though, enduring confidence doesn’t come from anything they own but someone they trust.
The longest-running study of human behaviour confirms this.
Started in 1938 and still running today, Harvard University’s Adult Development Study has consistently found that the stronger the connections with others, the greater one’s confidence and well-being.
While many things add to our confidence, it is our connections and relationships that support it best.
Without trusted connections and relationships, progress, particularly the difficult and complex progress in our lives is tougher.
Complexity tests our confidence.
COMPLEXITY
Like confidence, complexity is best defined by those experiencing it.
Complexities take many forms.
Complexities are the real or perceived dangers when clients feel their lifestyles are in danger of being disrupted or someone important to them is in financial peril.
Life’s setbacks and obstacles trigger our complexities.
Living or working with someone important in our lives, but with whom money issues consistently spark quarrels makes life more complex.
Losing loved ones can make any progress seem impossible. Similarly when we lose our health or when someone important to us loses their health, our past assumptions become future hopes as we struggle to regain needed foundations.
Our weaknesses make our complexities worse.
A weakness in how we plan, prioritise, follow-through, be objective, collaborate, listen, empathise, or how stubborn, arrogant or frightened we are, will all reduce the confidence needed to make the needed progress through difficult times.
Regardless of the cause, the origin of all advice is some type of complexity.
The ideal advice client is facing the hardest form of complexity.
HARD COMPLEXITY
While the genesis of the product-based financial advice industry has flourished by delivering soft advice, technology is shrinking distribution margins while regulation is adding additional costs.
As reliable, robust, well-supported and compliant ‘soft’ advisory products and services inevitably become more prolific and technology-driven, product or service-based (e.g. aged care specialists) differentiation alone will become increasingly difficult to establish and sustain.
Success in the future delivery of ‘soft-advice’ addressing ‘soft’ complexities will go to whoever manages to build, maintain and grow the world’s future advice platforms.
The future ideal advice clients will be those hoping to address the ‘hard’ complexities in their lives.
The financial product distributors have hijacked financial advice for too long creating a ridiculous and systemic market imbalance where the product tail has wagged the advice dog.
While products are important, technology’s creative destruction is slowly returning true financial advice to its original objective.
Providing the confidence, capabilities and paths to lead clients on their best possible lives regardless if products are required or not.
The creative destruction that helped forge Netflix’s success is now challenging its future.
That same force is now challenging advice to re-create itself, back to its origins – delivering value.
That will be built upon propositions that address each client’s own unique hard complexities.
What do you reckon?
Next blog – Ideal Client Part 4 – Unmet Objectives
Photo credit: By cottonbro from Pexels
ABOUT JIM STACKPOOL
For over 30 years, Jim has influenced, coached, and consulted advisory firms across Australia. His firm, Certainty Advice Group coaches, trains and is building a growing group of advisory firms delivering comprehensive, unconflicted advice, priced purely on value. The community of advisory firms aligns with Australia’s highest and only ACCC/IP Australia Certification Mark standard of comprehensive, unconflicted advice – Certainty Advice. He has authored four books regarding financial advice with his latest – What Price Value – available now since its release last month.