On not giving advice

Tony Vidler posted a great article on not giving advice. The essential premise is that the client may not want you to give formal advice - or even informal advice - but rather, simply act as a good sounding board for their own decision-making process. This connects strongly to my lived experience. Accountants, lawyers, fellow consultants, have all performed at their best when avoiding the quick move into the prescriptive, the planning, and the acting space. Not always, some times speed is vital, but not nearly so often as it is supposed. More often, asking good questions is the foundation for better decision-making - and not all of those decision have to be made by the adviser. In fact, the decision a client has the most emotional commitment to, is the one they choose through a guided discovery process. They appreciate the guidance, they know the discovery would not have been made without the presence of the trusted adviser. They really own the choice. How do I know? Because I have been in the place of both the client, seeking help in my own business, and the adviser, helping others with theirs. 

Understanding the preference of younger customers

As someone that fits into under 45 category, I am not surprised that those surveyed under 45 prefer to use electronic methods of communication. Through the use of electronic methods, you can easily and clearly express your interest, issues and concerns anywhere and at any time.  In order to serve all segments of your market, it is important to understand their preference. Click here to read Tony Vidler’s take on this topic


Tony Vidler: doubts that insurance churn is such a big issue

Here is an article from Tony Vidler discussing the churn of life and health insurance in NZ, and why he feels it is not as bad as everyone makes it out to be. There are some well-made points in here - for example, there are big trends towards more choice and greater consumer propensity to switch in all sorts of products (cars, houses, even once very stable banking relationships are more open to change). 

Necessities of Modern Marketing for Financial Advisers

Tony Vidler discusses some of the hurdles advisers face with the change in marketing methods over the last decade and outlines the 6 Necessities of Modern Marketing for Financial Advisers in this article.

Yes, social media is important, not impossible to avoid, but if you're reluctant to engage, worth asking yourself: why?

Yes, content creation - meaning, largely writing stuff, or doing some videos (which usually requires some writing first) is likely to be important too. Once again, if you are resistant to writing about your services, doing speeches, or videos, I sympathise. The resistance to this activity is real. But communication with wide audiences is built from these blocks.


United States: Transition from Commission to Fee-only

Hat tip to Tony Vidler for the reference to this piece (from his newsletter) - an article about a commission insurance agent of Northwestern Mutual in Kentucky who started a new business as a fee-only retirement income adviser. It is interesting because the process is richly described, including some of the financial details, and the steps through the process.

There are limitations, though, and anyone contemplating a transition process will need to undertake a lot more investigation and planning. Aside from the obvious difference in jurisdiction, there are other variations: the introduction talks about making the transition in only a few months, yet the founder is yet to pay himself a salary. The transition was not like-for-like advice - I would be interested to see a successful example of a transition to fee-only insurance advice. But well worth a read. 

Real Financial Advisers And Opinions

I just listened to this great podcast which carries the provocative title "real financial advisers should always have an opinion" - although I might take issue with the word 'always' I would like to go with the main thrust of the argument. Hat tip: Tony Vidler. 

Advice means, in the current Financial Advisers Act: "...a recommendation or gives an opinion in relation to acquiring or disposing of (including refraining from acquiring or disposing of) a financial product." So clearly, you are not a financial adviser unless you give a recommendation or an opinion.

That is a worthwhile definition, not least because it is the law, but also because it matches client expectations.

Clients of advisers want advice. Calling yourself an adviser and not giving advice is probably misleading.

There are, of course, exceptions. From time to time a financial adviser will provide limited services: perhaps just execution-only, sometimes just class advice. But if these come to dominate their advice business I suggest a re-branding. 

Marketing Financial Products: Consumers Refer to Many Sources

Consumers are referring to more than eight information sources before using investment products according to this post by Tony Vidler. Link. While we do not have data for the New Zealand insurance sector almost no-one believes that the decision is made on only one source of data any more. That must change the way you promote your services. Multiple promotional strategies so that your message can be found in many media are an obvious first-order conclusion. A second-order consequence is that you should consider how your message connects, contrasts, or contradicts the messages of others. Being different is eye-catching, but being completely out-of-step can make you less trust-worthy.