Many years ago a friend came to watch me rehearse with the band I was in at the time. Afterwards, he said he was bored as we had played Neil Young’s Southern Man over 20 times. I explained that was what practice was all about: finding your weaknesses, acknowledging them and correcting them.
At the Ideas Lab, we avoid suggesting strategies we have not been involved with previously. That is not to say those strategies we have been involved with have been successful in every case. We make no secret of the mistakes we have made in the past.
My own planning firm has made many mistakes and wrong turns in the 10 years it has been evolving. And as we get ready to rebrand I expect it will continue to do so. In short, I do not know if we will ever stop make changes, big or small, as we grow. Nor do I see any reason to justify it.
I have long believed that the time for change is when everything is going well. So when I hear people telling us to follow unproven processes or to take a less than focused approach, I cringe.
The mass market buys products based on need but I am unconvinced they will buy solutions, which is where the best and most fertile ground exists for professional planners. The mass market simply does not engage to the level they take part fully in the planning process.
So the idea recently promulgated at the CISI’s Financial Planning conference that ignoring the mass market is fatal to the longevity of a boutique-type firm is plain daft and reminds me of the maxim “those who can, do; those who can’t, teach”.
“I have long believed that the time for change is when everything is going well.”
The constant mantra on mass market robo-advice all too often ignores the fact it can be everything a firm offers or simply part of the firm’s toolkit. Few of the early robo firms have delivered profit and some are in a perilous position. That is not to say taking costs out of the advice process is a bad thing. It is not.
To be frank, we all need a typical client profile and we need to make sure our referral sources understand it too. We also need to ensure we maximise the longevity of the assets we manage by delivering service to those who will inherit those funds in due course. That may mean deploying a robo led solution, which then evolves into a full service over time.
Marketing takes time and needs consistency. I am currently selling a house and interacting with estate agents for the first time in years has made me even more convinced that, for local businesses to prosper, clarity in terms of ideal clients is essential.
We need to recognise the trends in the mass market but the certain elements that will impact on our own target group are more important. The pressure on investment charges that will flow from the robo area of operation is a case in point.
Having a defined client profile also helps with proving independence. I cannot see that you could be anything other than restricted when servicing the mass market. A future in solution sales is a buoyant one and enables far simpler evidence of value, which in turn helps with referrals and the flow of new clients.
So the next time you hear you are doing it all wrong, ask yourself whether the person sending that message is a successful financial planning business owner or someone who has never run one well. If it is the latter, treat what they say with extreme caution.
Robert Reid is director at The Ideas Lab