If you have not got a level five qualification you may be forgiven for some confusion. Some people advise that you should hurry up and get it, others say wait and see. If you don't want to pick through the technical arguments, try this one instead:
It depends on your attitude to training. If you think that all the training in getting level five is going to add very little, then you may place more weight on the value of delay. But if you think that they training is likely to be valuable, then even if the precise requirements change and you have to do some more training again later, you will get value, so go ahead, do level five.
I recently attended an ethics workshop hosted by Professional IQ. The last time I had formal ethics training was during my MBA course, a few years ago, and was interested to see what is being taught now. It was a good little course covering basics with about four of us in the room and the same joining online. In the end, for me the session left us with three important points:
Have a formal, written, process for checking the ethics of a situation of concern
Run your answers past someone you respect who has no financial or professional stake in the situation other than to help you
Keep a record
Although we used a different model in the workshop, the approach below was mentioned and when I looked it up later, I thought this is better. It is the Twelve Questions Method developed by Laura Nash. See this reference for details.
Have you defined the problem accurately?
How would you define the problem if you stood on the other side of the fence?
How did this situation occur in the first place?
To whom and what do you give your loyalties as a person and as a member of the company?
What is your intention in making this decision?
How does this intention compare with the likely results?
Whom could your decision or action injure?
Can you engage the affected parties in a discussion of the problem before you make your decision?
Are you confident that your position will be as valid over a long period of time as it seems now?
Could you disclose without qualms your decision or action to your boss, your family, or society as a whole?
What is the symbolic potential of your action if understood? If misunderstood?
Under what conditions would you allow exceptions to your stand?
Why do people think the way they do? Very often the cause of 'odd' responses is a result of cognitive biases. The more we investigate the sales process, the more we see that these apply, so I was delighted when I found this chart:
Recent valuation work has reiterated some of the fundamentals of valuation, and highlighted some recent changes:
The market doesn't lie - but it does have preferences, and what you can do with a business may unlock value ignored by the average of the market opinion. The point is that if you turn out not to be as clever as you thought you were, then the market number will prevail when you have to get out of your investment.
Value doesn't change just because you changed the valuation method. If using a multiple of renewals generates a markedly higher or lower number than a discounted cash flow that is telling you something about your assumptions in the DCF, or your business, or both. Look harder, or take advice.
Specialised businesses are worth more than general practices. Interesting - can you make your business worth more by simply narrowing your product range? no, of course not. Specialisation is more than that. When done right your customers are more loyal because they sought you out and/or have fewer alternatives.
If you are buying to hold then you should work on a DCF, if you are buying to sell, use the basis used by your market.
Changes in law and regulation have less effect than we thought: the rule of thumb is 'well, if muggins can comply, then with care and effort, I can certainly comply'. Effects of law and regulation are most keenly felt at the margins: making tiny and marginal businesses fail. Forcing out people who were really not complying anyway. Slowly increasing barriers to entry, making a licence more valuable.
Risk matters, and the portfolio effect is real. A poor reputation, a concentration of large cases, and aggressive insurers all have an effect on business value.
There can be a significant regional effect. Small town businesses have fewer buyers.
Apparently this is new, but I suspect most people that have been in sales, or professional advice, for more than a couple of years will have already figured this out. People first need to trust you before they can respect you. That initial liking, of the kind where they know you sufficiently well to rely on you, precedes competence. When you think about it, its obvious really. If someone is super-competent, but untrustworthy, then they are more likely to do me harm than someone trustworthy but less competent. Nevertheless, this post is worth a read: link.
When people cannot work out why poor advice is tolerated it is often because they have overlooked the value the customer placed on their trust in the adviser. When some people look at sales processes and break them down into mechanical steps that, at first glance, it looks like anyone could perform, they are overlooking the necessity for trust.
How do you put customers interests first? Strategi has this guide for AFAs, based on compliance with current Code Standards. Taking a ground up approach to demonstrating how you put clients first in your business may be a great way to conduct a thorough review of your systems and processes. Here is an imagined process for insurance advisers looking to meet the requirements for Client First:
Vision: what represents a good outcome for the client in your process? How might you test that with clients? How do you know that is working for them? How does your service compare with other similar services? What evidence can you find to support your vision of a great insurance advice service for customers? How often does your board or management team review that process? If you are a sole trader, what training or education, or collegiate industry groups provide you with ways to review the process?
What possible conflicts between the client's interest and your own interest can occur? Make a list and consider each potential conflict: scale, frequency, what interests compete and describe them. Consider Code Standard one and five. What methods for resolving the conflict exist? Can you eliminate it? Can you disclose it? How will you ensure that you place the client interest before your own in the advice process? Under what circumstances would a conflict become too hard to manage - and you therefore choose to withdraw from the engagement.
David Chaplin has this report on the number of AFAs and their business composition. Although a small uptick in Authorisations has occurred, this is not enough to make much of a dent in the ratio of population to advisers. More is required. You may also consider the age of advisers, growth rates of their businesses, and composition of the advice market. Link.
No, the sharing economy is neither exempt from human behaviour, nor the law. Although some people think it is, that's just because you can often get away with it for a while... until disaster strikes. Sometimes people will behave badly, or have accidents, and break something really valuable in your Airbnb rental. If you then go and claim the insurer may point out that your house and contents cover was priced as a 'me living in the property' not 'renting the property out' cover. But this is easily fixed, they sell the other type, and you should buy it. It isn't even that expensive. So now you have no excuse.