View more on these topics

David Shelton: The advice market hasn’t really changed in 25 years

David Shelton

I am retiring and this is an incredibly difficult article to write. Not because of the retirement but because of the need for originality. The typical ingredients for a retirement piece would be to look back or forward, to pass on some pearls of wisdom or make controversial predictions to attract attention for the last time.

But I want to be different. I want to attack the topic from a new perspective and provide readers with a worthwhile three minutes of something they can use and that will last.

Let’s clear the decks of the obligatory reflections and market observations. In summary, nothing fundamental has changed over the 25 years I have been working with advice businesses. There is a cycle of regulatory initiatives and economic shocks, predictions of the disappearance of face-to-face advice, adaptation to change, then a brief period of stability. Over this time the advice market has become stronger and businesses more adaptable. Clients are also getting increasingly good value for money.

That sums up the past. What about the future? Nothing controversial here: it will be more of the same. The same cycle, the same business resilience and the same pressure to provide effective benefits to clients. If firms concentrate on the latter and keep an eye on the changing competition they will not go far wrong.

So, what about the pearls of wisdom? Those who have worked with me will recognise the following:

  • Develop a thorough business plan and update it annually
  • Make sure you track implementation projects to get things done and work at honing and delivering a competitive client proposition and service
  • To build business value focus on the clients, recruiting and developing the right people, monitoring the financials and streamlining processes and technology. In essence, keep it simple and concentrate on the people inside and outside the business. The rest will follow.

If you pressed me to highlight one area to get right above all others, I would go for people. After all, out of all your resources it is people that actually make things happen.

Now the hard part: something original. Let’s stick with people. Business consultants need to understand your business and will often ask which car, person or animal it might be. This can lead to useful insights, particularly if different people in the firm come up with conflicting answers.

“Is that the best he can do after 20-odd years in the market?” I hear you cry. It may sound superficial but running this exercise for just 10 minutes will tell you more about what your team think than any formal survey or weekly meeting.

But there is a twist: use countries as the simile and focus on the characteristics of the people. For example, a spectrum running from Poland, through Germany, Switzerland, Italy, Australia and the US demonstrates very different national styles and tells you what your business feels like to all your co-workers in a snapshot. You get more detail when you ask people why they made their particular choice.

There are no right answers but you need to reflect on what has been said, what rings true, what is surprising and what makes you feel uncomfortable. You may want to use the next meeting to sum up the picture and ask what should be done, if anything. This short exercise shows you are listening and gets everyone involved.

I found a useful quote from leadership and management consultant Simon Sinek that sums this up: “When people are financially invested, they want a return. When people are emotionally invested, they want to contribute.”

I could have used a more complex idea (I am well known for busy Powerpoint charts) but I wanted to finish in the style I have used in all my work with advice firms; a style I would particularly recommend to business owners.

Make sure your strategies, policies and action plans are practical, straight forward, achievable and comprehensible to everyone in the business. Most successful advice businesses have kept their feet on the ground, evolved over time and carried their people and clients with them. Use your planning to prioritise what needs to be done and recognise that if 20 per cent has to wait until next year you have a better chance of achieving the 80 per cent that is really important.

Perhaps you will allow me my last few words to thank all the principals and advisers I have worked with, and the many service and product providers that have supported my services. I owe much to fellow columnist Danby Bloch, the inspiration for my book The Business of Advice, and to Clerical Medical for giving me the opportunity to work directly with advice firms.

My final piece of advice is this. When you next engage a consultant ask them three things: how much time will you save me, will the outcome of your work be practical and what are the benefits you will bring me? Potential clients may well ask you the same questions – and note there is no reference to price.

David Shelton is a consultant at Stoke Bishop Associates

Recommended

Money-UK-Currency-Notes-50-480.jpg
1

Advice firm director banned for ‘unacceptable’ record-keeping

The director of two financial services companies including a Chelmsford advice firm has been disqualified for eight years due to poor record keeping. James Lau was director of WFM Management Services, a financial advice firm, and GG Blue Sky, a derivatives trading business. Both companies were placed into liquidation in September 2013, with an estimated […]

FCA logo new 3 620x430
12

FCA relaxes cross-subsidy rules to boost access to advice

The FCA plans to change its adviser charging rules for vertically integrated firms in a bid to encourage more firms to invest in developing advice services. A quarterly consultation paper,published today, says the proposed change follows a Financial Advice Market Review recommendation to consult on guidance around cross-subsidisation rules and their interpretation. The rules were introduced […]

7

£30,000 advice limit has resulted in ‘market failure’ TPAS chief says

The Government’s £30,000 mandatory advice limit for safeguarded benefits has resulted in a “market failure” according to The Pensions Advisory Service chief executive Michelle Cracknell. In the wake of the pension freedoms, the Government required consumers to take advice when transferring out of a policy with safeguarded benefits, including defined benefits and guaranteed annuity rates, […]

Martin Foden discusses how convenience is affecting the construction of fixed income portfolios

In this short video, Martin Foden, head of credit research at Royal London Asset Management, discusses how convenience is affecting the construction of fixed income portfolios. Watch the video in full The value of investments and the income from them is not guaranteed and may go down as well as up and investors may not […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment