This is when I'll pay for financial advice
Only one independent financial adviser tried to sell me something last week, in seven days where I shook hands with around one hundred and fifty IFAs and financial planners at a variety of events, presentations and seminars.
He skilfully took me to one side and explained that I looked like an astute person who would see the significant benefits in investing in a particular fund. Multi-coloured graphs were produced in support of his argument, along with a gift of the gab that I had not heard in a long while. The only thing ‘new model’ about him was his shirt. Oddly, he didn’t have a business card with him.
In a way, I was surprisingly impressed at this overt display of optimistic and proactive salesmanship; something I had been lead to believe had died out with the dinosaurs, LAPR and MIRAS – and also in a week when the RDR consultancy paper was issued.
What a contrast this was with earlier in the week when I spent two days with George Kinder and prospective Life Planners on his acclaimed Seven Stages of Money Maturity workshop. For some within the profession, George Kinder’s approach to engaging with clients is at exactly the opposite end of the spectrum from my friend with the graphs.
The venue for Kinder’s workshop was St Ethelburga’s church in the City of London. The last time I had been there was the day before an IRA bomb devasted the building in April 1993. Now restored and described as ‘a place to inspire and equip people to pursue reconciliation and peacemaking in their own communities and lives’ – it could not have been a more perfect venue, and one that New Model Shirt would undoubtedly have struggled with.
But there are also professional IFAs and financial planners who equally struggle with understanding what Kinder is bringing to the table, and why St Ethelburga’s is the ideal venue for his training.
“Isn’t it life coaching?” is a question I’ve been asked. And from those who perhaps know a little about Kinder’s methodology often comes “We already do most of that stuff”.
Well, no it isn’t and no you don’t. Nowhere near.
It’s understandable then, that an industry which prides itself on the demonstration of professionalism by examination and qualifications would find no place for life coaching as part of its proposition. Heaven forbid. Yet, this is the same industry which has, for the most part given away its services for ‘free’ for as long as we can remember. Not even life coaches do that, so it’s no surprise that change is hard to embrace for many.
But change is exactly what’s needed – and at many different levels. Not just how we’re remunerated, but in how we are perceived, how we brand and promote ourselves, how we run our businesses, how we engage with the media (yes really), how we use technology and in so many other ways.
Whilst exams, qualifications and remuneration seem to be at the heart of the professionalism debate, I’d venture to suggest that they are not the key issues for the profession to focus on. Qualifications are merely your ticket to the game, and if the RDR paper is anything to go by, the remuneration issue is finally put to bed. Which means that we can now focus on what professionalism is really all about – how we engage with clients. New Model Shirt is at one end of the scale; George Kinder is at the other.
In my thirty one years working with IFAs and financial planners (and now Life Planners), with the exception of procedural process dictated by regulation, I have to admit to having seen little change in the way we engage with clients. ‘Knowing your client’ sounds like commonsense to most reasonable people, but I wonder just how seriously this is embraced beyond filling in boxes on a fact find.
Well, if you know anything about George Kinder’s methodology, you’ll have grasped that that knowing your client takes on a completely different and fundamentally deeper meaning. In fact, it was suggested to me last week that when a client doesn’t proceed with recommendations you have made to them, it is only because YOU the financial adviser have failed to truly understand the client’s motivations and goals. You asked all the questions on the fact find, you ticked all the boxes, you did your research, you made your recommendations, the client made the right noises – but they still didn’t follow your advice.
What happened? Client inertia? Price? A friend in the pub suggested a different solution? Or was it because you never really got deep under the skin of the client to uncover what really drives them as a human being?
Anyone who deals with money is under immense scrutiny right now – whether ‘greedy bankers’, MPs, financial advisers or whoever. All are quite rightly searching for ways to enhance the perception of their trustworthiness and credibility, and at the end of the day that will be determined by how each interacts with their customers.
Now if you want to call George Kinder’s methodology ‘life coaching’ that’s fine with me, but if a graduate of the Kinder Institute helps me to uncover my deepest and most profound goals – and can actually help me achieve them, frankly I don’t care what it’s called. But to be clear, life coaches as we know them do not normally (and are not qualified to) help with your financial affairs, and it will be a financial planner’s skill with money which will help to translate life goals into reality. It’s called Life Planning – not Life Coaching.
But that’s not to say that today’s financial adviser shouldn’t be offering services that make themselves more attractive to and more relevant to today’s consumer. Despite the current economic environment, we are a more wealthy society today and we naturally aspire to more affluent lifestyles – and that often includes the trappings of money such as life and fitness coaches, cleaners, gardeners and so on.
So whilst I’ve gone out of my way to say that financial advisers are not l
Author: Philip Calvert
Posted: Monday, June 29, 2009 | 11:52:21 AM