In the current environment of the financial planning sector, I’m sure that a number of on-lookers from outside of the industry are like me, shaking their heads.
Get this… they actually have legislation that ‘enforces’ that financial advisers provide advice that is based on the best interest of their clients.
Most thinking people in business understand that acting in the clients best interest is just good business. Why? Because People Get Your Truth… over time your intentions, promises, actions and results will either promote or expose you.
I’ve posted a number of times on this site that I am an advocate of seeking professional financial advice.
For most of us, we are not the experts when it comes to managing our finances in ways that will help protect the assets we have accumulated and give us the best opportunity to maximise our potential to build our wealth over time through spending less than we earn and investing in ways that match our immediate, short and long term financial goals, whilst balancing our often unrealistic desire for the highest returns on our investments with the lowest possible risk (good luck with that idea).
But back to the point of this post – Even When Trust Exists – Value Recognition May Not!
Earlier this week I presented to The Junction Works – a not-for-profit organisation that is doing amazing work in the western suburbs of Sydney, helping young people with disabilities and the underprivileged sector (learn more about The Junction Works here).
During my presentation I reminded these wonderful ‘care workers’ about the importance of communicating the ‘positive impact’… however small that positive impact might be for their clients… and to communicate their joy to their clients, to the families of their clients, to the influencers of their clients and families of their clients, and to their internal colleagues and leadership team.
Even when ‘good advice’ is the norm, when something becomes ‘the norm’ we just get used to it.
Why the importance of communicating the ‘positive impact’? Because unless we do it… no matter how uncomfortable this might be for a nation who is brought up on the adage of ‘Don’t Brag’, without communicating the positive impact we are making, that positive impact can just become ‘the norm’ and when something becomes ‘the norm’ we just get used to it… and when we just get used to things, we undervalue them.
This is one of the key areas where the dis-trust (disengaged trust) exists for financial planners.
I have been consulting, coaching and presenting to the financial advice profession for the best part of 25 years… and the latest ‘shemozzle’ of questionable trust that the financial advice profession finds itself facing is certainly of high concern, not only to those inside the industry and their clients, it also sows seeds of doubt, confusion, question and again of dis-trust (disengaged trust) for the potential clients who want to seek financial advice, but don’t know who to trust.
While written last year, Bryan Ashenden wrote an excellent article for Money Management magazine, and he pointed out that a survey conducted by the Roy Morgan Group on which industries/professions were considered to be the most ethical, honest and trustworthy, Financial Planners ranked 18th out of the 30 professions mentioned.
However, Ashenden also points out that in ‘many studies’ clients of financial advisers (those who are actually receiving and acting on that advice) ‘have felt more comfortable during difficult times, such as the GFC or during more recent times of market volatility’.
OK, so many clients (certainly not all, based on current reports in the media) of financial advisers, don’t have a trust issue with their advisers, and that is certainly the case for Liz and myself – we have complete trust in the advice from our financial adviser, and have no doubt in our mind that when he provides us with advice, he is acting at all times with our Best Interest at top of his mind.
A problem of value-recognition and trust void
So what I see is the problem is that despite the fact that many (and again, certainly not all) clients of financial advisers have high levels of trust… for those who are either thinking about seeking financial advice, and those who probably ought to be thinking about seeking financial advice, face this uncertainty about who they can trust… in other words there is a value-recognition and trust void.
For all of us in business, one lesson from this is to ensure we look for ways to keep delivering additional value for our clients beyond what they’ve just ‘got used to’… we need to remind clients about the way we are delivering value to meet and wherever possible to exceed their expectations and always delivered in their best interest, and in doing so, we earn the trust and the ‘right’ for our happy clients to become advocates who readily refer others to us.
This is how we fill the value-recognition void.