Why are clients paying your financial advisory fees?
Here’s some real examples taken from last week’s conversations between the advisers we work with and their clients:
- “I just want to stop worrying as to whether I can afford the basics…”
- “I just want to get away a couple of times a year. I feel we can’t at present. As a matter of fact, we haven’t taken a good break since our youngest was born and she is now half-way through primary school…”
- “I just want to support my Mum. She needs to be closer to us and I’d like her in a small unit nearby. She’s getting frail and she’s too far away, particularly since Dad died last year…”
- “I’ve been saying this for years now, but I just really want to give it a crack with my own business and I really think now is the time. I know [wife] won’t agree, but the [work] travel is killing me as well as the uncertainty surrounding the constant re-structures with my current employer…”
- “We just really want to be able to travel and see our grandchildren more often. It’s important that grandkids know their grandparents…”
- “I just want to be able to give my kids some cash when they turn 40. Not when they are starting out. The real financial reality hit us when we turned 40 and it was a real shock that there was at least another 10-15 years of financial mountains in front of us. Similarly, I want to be able to give my grandkids some cash when they turn 25. They can get themselves through the left-school-early-twenties piss-it-up-against-the-wall stage and then I’ll help them out…”
Just by reading the above conversations your intuition tells you that these clients aren’t focused on self-managed superannuation funds, or tax structures, or savings plans, or investment strategies.
They, like most of us, are much more interested in achieving stuff important to them.
Until the financial advice industry figures out the obviousness about this, it will never achieve greater acceptance from Australians.
The reason why only approximately 18% of Australians use a financial planner today (see Report 230 – Financial literacy and behavioural change – ASIC March 2011) is because we pay, focus, train, portray, and promote for advisers NOT to focus and solve the above issues, but to demonstrate the skills, expertise and experience in the products, platforms, knowledge, strategies, and laws used as the tools of trade.
The reason why only a minority of Australians use a financial planner is because the majority of financial planners primarily focus on the client’s money before focusing upon the client and the significant outcomes clients want to achieve in their financial lives.
How the majority of our industry implemented the Financial Services Reforms introduced back in 2003 has produced a compliant, money-focused and expert industry, whose behaviours and mindsets generally conflict with our real reason for being – namely, to bring as much financial certainty to the lives of our clients as possible as they try to achieve the financial outcomes required to match their aspirations, dreams, wants, and desires.
For instance, the financial planning seminars that draw the biggest crowds at present seem to be those that promote our skills in self-managed superannuation funds. Self-managed superannuation funds, for heaven’s sake, are a dinner-party conversation topic – what the?
Setting up a self-managed super fund and objectively managing your future financial life are very different skills sets.
That’s like picking a doctor on the brand of scalpels she uses.
Don’t get me wrong.
I don’t want to go under the knife of any surgeon that can’t expertly handle their scalpel, but I’m more interested in the outcomes from my surgery than the process. I want a doctor that can help me get back to my (slow) running, my morning ocean swims, without extensive surgery (and preferably with none at all).
When will our industry wake up to the fact that managing the ongoing behaviours of our clients will have far more influence on them best achieving the financial outcomes they desire, than will just placing them in today’s best tax structure, today’s best savings plans, today’s best investment plan or platforms?
When will this industry get this?
Image courtesy of arztsamui / FreeDigitalPhotos.net
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.