We are awash with recommendations on how to “improve the advice business”.
Regulators, politicians, consumer groups, product manufacturers…competing business models that look to bypass advice entirely….all of them are making a lot of noise about how advice delivery can be improved.
Much of what they say has merit of course, and real issues have been identified which require change. Ethics, business practices, technical competency…all require at the very least a re-think and the status quo should be challenged in these areas.
Amidst all the talk and amidst the freshly invigorated focus on how to make advisers better at advising, there is a missing ingredient which is critical to the advisers being effective at delivering actual advice to actual consumers: skills.
In a manner of speaking even the regulators recognise the necessity, with ASIC saying:
“Licensees should ensure that even experienced advisers remain abreast of all regulatory and product changes, and continue to develop their skills.”
There has been a serious underinvestment in soft skills development in this part of the world for a decade. We are seeing a new generation of advisers trying to develop advisory businesses with insufficient engagement skills. There has been a massive shift in training and professional development emphasis to technical training, and ensuring technical proficiency and many advisers are now technically very competent indeed – but still struggle to get prospective clients to engage fully, if in fact they find enough genuine prospects at all.
There are three broad areas of continual development for a great professional adviser:
1. Technical competency
2. Ethical behavior & standards
3. Delivery skills
The evolving profession of financial advice has focused largely on the first two as these are the areas where professional standards can be raised relatively swiftly, and competence and confidence in the sector improved.
For advisers to be truly effective professionally however, they need a significant array of commercial and relationship management skills. It is in this area that the greatest ROI can be found incidentally for the advice business. Developing greater sales skills, founded upon ethical standards and technical competency, will be the swiftest way for advice businesses to grow and deliver greater value to clients.
Of course many experienced practitioners feel that they already have all the necessary skills….and perhaps they do. Interestingly however, I have found that some poor advisers are poor because they are focussed almost entirely upon skills – essentially neglecting to develope professional competence or indulging in questionable tactics. Equally however, I have observed a reasonably high proportion of experienced advisers who have assumed their skills are entirely adequate and have neglected to develope them in any meaningful way during the last decade. As a consequence there are advisers with vastly improved technical competency and absolutely professional behaviour, but who are apparently unaware that closing techniques and the likes don’t really fit. So they struggle to engage todays prospective customers as well.
Many advisers will grandly state “I have 20 years of experience and skills”…..yet when it comes to skills development this is not really an accurate self assessment of competency. It would be more accurate to say they have 10 years of skills development, and then 10 years of technical development. That is not good enough in today’s environment.
Today’s consumers have become more sophisticated and are leading far more complicated lives, society has shifted and begun to re-shape itself, and they communicate and engage very differently to a decade (or more) ago. Technical information is far more readily available for any consumer with a smartphone and professional behaviour and processes are a minimum expectation, so skills becomes a defining point of difference between those practitioners who achieve higher than average engagement levels and those who struggle along no matter how many CPD hours they have clocked up.
Smart advice businesses will be ensuring that the balance is right in their professional development program, and ensuring that there is a genuine focus on improving delivery skills too. If I am to be entirely commercial about it, that is where the best ROI lies in your professional development spending, so it deserves higher attention for that reason alone.
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