December 2012 had all the hallmarks of finality. A galactic alignment 26,000 years in the making and an historic “year zero” according to arcane texts, signalling a great end to the world as we know it.
This was expected to be the day that massive solar flares were to burst off our sun, scorching the planet’s surface, sparking gargantuan earthquakes, monstrous tsunamis and the end of humanity.
RDR? Mayan prophesy? Well, that was the theory. But then death-wish zeitgeist has been part of the human experience for centuries. Why do we keep trying to kill ourselves off? Who knows. Yet, to date, most forecast apocalypses have turned out better than expected.
One of the perhaps overzealous views expressed is hyperbole regarding the polarisation of client behaviours. On one side, there were those espousing that hundreds and thousands of people would awake on 1 January, shunning the strains of the night before, emboldened and sufficiently educated to make difficult financial decisions all on their tod.
Their argument followed that once the true cost of advice is revealed, many will fail to see the value and “do it themselves”. On the flipside, many played
down this assertion, holding tight to the undoubted complexity of
financial affairs and the expected continued reliance on an adviser to “do it for me”.
As is usually the case, the answer most probably lies somewhere in between. This goes part way to explain the shift (finally) from robo-chatter to next generation advice models – which sound and seem far more fit for purpose.
To justify fees evidently requires ongoing service. Can that service be delivered to mass affluent clients? How? The traditional face-to-face approach will be right (and financially justifiable) for some, but how many? Is it more likely that most individuals, irrespective of wealth, will not want or expect to use one or other of these approaches?
It may be convenient for us to put clients in neat boxes but the chances are they will prefer to interact with advice in a number of ways at different times.
And so we should consider the possibility that most clients (if we take into account their needs rather than our preferred segmentation models) could be better defined and served as “do it with me”, which looks far less static and requires far tighter integration between pieces and players across the advisory value chain.
Phil Wickenden is managing director of Cicero Research