Financial planning wars?

Are we an industry or a profession? Financial planners or financial advisers? Do we help clients secure their futures or are we only concerned with our own?

Over the past few months, I have witnessed different financial services role-players become more and more vocal about their views. I fully support robust debate; what does concern me, however, is what people are saying in an attempt to differentiate themselves from their peers.

The first rule – never knock your competition

Back in 1998 I started working in financial services. The very first rule I was taught, was:

Never knock your competition. Ever.

In the US, competitors frequently take one another on in advertisements, interviews and other media. I get the sense that the same is starting to happen in South Africa.

For instance, I see statements and articles aimed at promoting “Lifestyle Financial Planning” and “Financial Coaching” over other approaches. It is fantastic to see that engagement and financial planning models are becoming more nuanced. Except that a good portion of these articles focus on knocking those who do not follow this approach. And that is what concerns me:

Advisers or planners following other approaches are often labeled as sales-focused, commission-driven or even as not having their clients’ best interests at heart.

Have you ever had two friends who did not get along? Neither had anything good to say about the other. Chances are you are no longer friends with either of them. Why? Because being caught in the middle left a bad taste in your mouth. This is what I fear is slowly starting to happen to us.

When role-players in an industry or profession consistently criticise each other, clients take note. As clients observe the ongoing finger-pointing, their trust in the industry or profession is likely to decline exponentially, and they will opt out of engaging with us.

I have yet to meet one

In my career, I have yet to meet a single financial adviser or planner who does not care deeply about both his or her clients and practice. All advisers want to build sustainable relationships with their clients; want to do things better; want to evolve and grow. And most importantly, all advisers or planners I have met want to do right by their clients.

We genuinely care. All of us.

I have also never met a client or beneficiary who was unhappy to receive a payout after a successful claim. The latest claim statistics released recently by various Life Assurance companies show staggeringly high numbers. The difference that these payouts have made to the lives of countless people and the South African economy would be hard to match by any other industry.

Leadership and guidance

When we run any business, we must be aware of the different environments we operate in, how they change and evolve over time and what we should do to adapt and ensure we stay abreast with best practices and the changing needs of our clients.

It makes sense, it is logical and it is what all successful businesses do.

Instead of labeling, encourage and inspire

But when you are a sole proprietor, it is not as easy and as logical as it appears to be. When you are running a practice, managing finances, meeting with clients, giving advice, doing reviews, staying up to date with markets and products, doing prospecting and who knows what else, chances are good that researching new trends, approaches, processes and systems to offer your clients may not easily fit onto your to-do list. Does this reality absolve us from making time for these activities? Absolutely not. We have a responsibility to our loyal clients to make sure they continue to receive access to the benefits of new perspectives and fresh ways of doing things.

So where do leadership and guidance fit in with this?

When we start advocating for new ways of doing things or introducing new approaches for financial planning, we owe it to our peers and clients alike to be generous with new information.  We must share resources and knowledge with other financial advisers and planners. We must encourage and guide each other to take action and support one another through the changes.

We must tell clients what we are doing to make our industry and profession better every single day so that they can trust us and confidently do business with us.

One for all and all for one

Let us come together and join forces for the same purpose: to elevate and transform Financial Services, financial planning and the insurance industry into a full-blown profession.

Let us help and support each other

This can only happen if we have each other’s backs instead of taking a back-stabbing stance.

Let us help and support each other. And where an adviser or planner is not behaving professionally, we must engage and influence them to do better. If they choose not to do better, they must be dealt with swiftly to protect the integrity of our financial planning world. Fortunately, current regulation facilitates this.

If peer criticism is not a successful route to differentiation, how does one differentiate oneself, you ask? Be very clear in articulating why you do what you do, what you do, how you do it, what value you add, what expertise you possess, and who you help.

Do not be concerned with comparing what you do with what others do not do. Clients will figure that out for themselves.