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A view to a skill

Geoff Gaunt, proprietor of Prism training and development, believes many people are getting embroiled in arguments over the RDR instead of preparing to adapt to focusing on advice rather than sales and training staff to use new skill sets

Much of the debate over the retail distribution review has centred on the words used in the document, the titles by which advisers will be known and the qualifications that will be needed by advisers.

These are important aspects and a natural focus for attention but the implications of the review’s outcome mean that firms, sales management and advisers will have to start thinking about the skill sets that will be needed in the not too distant future.

It is the application of these skills which need attention because the future will be about advice, not selling. This article seeks to raise some issues for consideration.

In running my own businesses, I have a simple principle – the purpose of the business is not to make money but to serve the client. The result will be money.

The firm or adviser that follows this strategy will demonstrate a set of behaviours and use a skill set which is totally different from that which must be used if the strategy of the firm is to make money by selling products, in effect, a very different objective to the one highlighted above.

This may be obvious to readers but consider the methods that some firms use in our industry to monitor outputs.

There are many firms which measure their advisers in terms of appointments made, business secured, cases written, commission earned, and targets achieved.

It is often these measure-ments which dictate bonus rates, salary levels and kudos within the team. Where these circumstances exist, the adviser will often focus on the measurements because they would otherwise personally suffer financially.

I am not for a second suggesting that advisers are immoral or unethical, merely that the current system often forces advisers to change behaviour in the pursuit of making a living and pay the bills.

To a large extent, the training that advisers receive (and have received) continues to perpetuate this behaviour.

Many training teams still train closing skills, objection handling and questioning technique which is aimed at selling the product, in the same way that one would sell double-glazing or motor cars.

Those of you who have read the RDR will have reached the conclusion that the FSA’s thrust will lead to tiers of adviser as well as tiers of advice.

As a result, it is my belief that we will begin to see the emergence of two distinct groups of firms and advisers – those whose motivation is to make money and those whose motivation is to serve the client.

For firms and advisers who cannot or do not want to embrace the role of professional financial planner, then I suspect this will be acceptable to the regulator, subject to capital adequacy and the relevant regulatory rules being met.

For those who want to take advantage of lighttouch regulation, chartered status is likely to be the route forward. But what of the skill set to which I referred in the opening paragraph?

Before looking at the various skills which I believe will be needed in the future, consider the following points.

Current sales models place greater emphasis on sales efficiency than on sales effectiveness.

I refer here to the firms and sales managers who insist that more activity is best rather than encouraging their advisers to spend more time on fewer clients.

Training teams spend time helping advisers to handle objections. Who creates these objections in the first place? Very often, it is the adviser himself or herself who creates the fertile breeding ground for them. Why not train people to do the job correctly so that objections do not arise?

In many cases, questioning technique is inappropriate for the business in which we spend our time.

We should be training advisers to think with the end in mind. What time is spent before each meeting with a client to get to know the likely areas for discussion? What research is done about the client?

It is often the case that advisers ask questions which follow a set pattern, usually ending up with a question which closes the client down.

Many training teams still spend time on the various closing behaviours that can be used in front of a client. Many of these closing techniques are from the 1960s and are inappropriate for the world in which we find ourselves.

Many of these skills and motivational tools will work in other industries, such as the motor trade or double glazing but the difference between them and our industry is symmetry of information.

By and large, where the goods being bought are identifiable, the client can see what they are buying, they probably have bought one before and have some idea of what they want.

Products sold within our industry lack this symmetry from a client perspective and this is why I believe the terminology of sales skills should not be used in respect of the products.

This raises an interesting point. What is our product?

I contend that our product is the service that we offer and it is this aspect that we should be selling to a client. To do this, we need to identify the various features of our service and recognise the advantages that these features can bring to a client.

Once firms and advisers have formulated their new (or amended) business model, they will need to determine the way in which their behaviour must change in order to walk the talk.

Advisers and firms who want to embrace the outcomes of the RDR will need to establish a new set of skills and behaviours to meet the challenges.

To do this, a detailed training audit will need to be conducted to identify the training gap. This audit should reveal the skills and behaviours which need to be implemented. In no particular order, the following may be a sample of worthy contenders:

Mentoring and education

The role of a mentor allows the mentee to arrive at their own decisions based on non-threatening questions.

The client will value the service if they feel that the adviser is on the same side of the fence as they are especially if the process is a learning opportunity based on their interactions with the adviser. Fees will be much more acceptable in these circumstances.


Until now, advisers have not really needed to negotiate – I make the difference here between horse trading and negotiation – as the commission was paid once the product was sold.

However, on a fee basis, negotiation skills will be more valuable because advisers will need to influence the client by helping them to see the value of their offering.

In addition, we must not forget that as more advisers enter the fee-based arena, negotiation will assume a more important role.

How would you market your service at £300 per hour when your competitor’s fees are only £200 per hour? What are your differentiators that can place an additional £100 per hour on your services?

Regular reviews and correspondence

The selling model means that an adviser must constantly look for the next meal and this puts existing clients at a disadvantage because they do not receive the service they were promised or believe they should receive.

The adviser working on fees must maintain regular contact with the client because the relationship is different. It is that of a mentor rather than a product seller.

Since 1986, the regulators have constantly tried to change the business model with little success. We will continue to have these reviews until we get it right. I believe that the outcome of the RDR could get us to the point at which we become a profession in the eyes of the public but to do so we need to change our mindset and our language.

Geoff Gaunt is a fellow of the PFS, a chartered financial planner and the proprietor of Prism training and development


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