Enriching the Enricher
Day in and day out, Australian advisers enrich the lives of their clients. But who is enriching the enricher?
We live in a time of enormous industry flux: heightened regulation, increased consumer expectations and the exit of institutional owners of advice brands has created a moment in history to pause and reflect on the future for quality financial advice in Australia.
The complex array of issues facing advisers has taken a toll. In 2021, we see fewer adviser numbers, greater compliance, more headaches, stress and difficult decisions about the purpose and future for those who strive to add value to the experience and wellbeing of their clients.
The challenges facing advisers are obvious in the daily headlines of industry media, describing the difficulties facing today’s adviser, much of it a compliance burden.
In conjunction with the stress and practical impacts of meeting the requirements of a professional exam testing higher education and ethical standards, there are additional pressures.
Do I still love what I do? If not, what is my go-forward operating model? Do I have a succession plan? Is self-licensing the right choice for me? Do I have the right technology in place? Choosing to enter the profession as a young adviser, am I sustainably equipped and well-supported to continue my quality advice proposition well into the future?
It is incumbent upon advice leaders to think about these issues, resolve them for our own network and clients, but also to consider how the broader advice sector is faring in these days of flux and stress.
Life enrichment is part of our DNA, so the following is offered to encourage all advisers, so they in turn can continue enriching the lives of their clients.
LET’S GET BACK TO OUR WHY?
Do advisers today still love what they do? Are they living their best life doing it?
While the source of current stress derives largely from increased regulation, the challenge ahead for sustainable quality advice in Australia is not about being a compliance factory. Nor is it just about deploying the smartest customer relationship management (CRM) technology or the best paraplanning solution.
The greatest challenge is finding the most sustainable way for genuine advisers to ‘self-help’. In other words, chart a course back to the motivations that made them become an adviser in the first place. Client care, quality advice, being the central influencer in the wellbeing of families and businesspeople who come to you for wise life counsel, goal setting and financial acumen.
Call it a mindset shift, but we need to offset the ‘compliance-factory’ thinking in order to re-charge how we feel about advice and the advisers that have toughed out the ever-expanding trials of regulation. To move from an introspective point of view to an outward perspective is needed to imagine how our vital profession will thrive.
It’s not all negative. Opportunity is abundant, brought about by the industry’s current challenges, and the impressive examples of innovation and ‘thinking outside the square’ that prevail. I believe we should remind ourselves about the power of the alignment of core values, directed by the purpose of advice and reconnecting with the essential driver of why I am here serving the client and loving what I do.
Speaking recently with practitioners from the wider financial advice profession, the biggest concern I hear is that advisers are simply no longer able to do what they love.
This is a circumstance we hear all too often speaking with advisers looking to make a change, seek some clarity and find their ‘tribe’. I am privileged to have detailed conversations with advisers who approach our firm as they vet their licensing and commercial model options. Usually, the conversation is not about hard economics. It is almost always about reconnecting with the core of why it is he or she chose to become a trusted financial adviser in the first place.
For example, an adviser who recently partnered with Fitzpatricks decided to come on board from an institutional license as this allowed him the opportunity for renewal. It has helped him bring to life a business that is run the way he wants it to, setting his own fee-for-service basis and deciding exactly the type of higher net wealth clients he will serve.
Our job as partner to advisers is to facilitate the alignment of his purpose with the appropriate support structures. Providing the technological tools, allowing for compliant advice to clients, enabling his participation as part of a community of like-minded professionals who collaborate and share intellectual property. True enrichment and sustainable practice are the goals here and identifying that vision does not always start with a conversation about commercial terms.
INNOVATION AND CLEAR AIR
Adding to the greater regulatory imposts in our sector are the practical issues experienced across the industry. These include the cessation of product rebates and commissions, unbundling of pre-existing distribution business models, and the last resort succession models… the list of structural industry issues goes on.
The result is that many advisers find themselves at a practical stalemate.
Surely these practical constraints provide a golden opportunity for genuine innovation and better technology solutions to rise? Australians seek more quality financial advice, not less. But with less advisers to serve, the opportunities for the advice sector currently are profound. However, to slip back into the ‘compliance factory’ mindset would be an opportunity lost.
With a newfound professional landscape opening, the opportunity for innovative thinking and digital technology to act as an enabler, not a rigid internal compliance or commission tracker, is ahead of us.
For advisers to get back to the heart of what they do, to enrich the lives of their clients, it is crucial they are equipped with the required tools. Employing business models in the backend that engage with this purpose-led value proposition, smartly facilitated by technology mechanisms to deliver great outcomes.
This comes to life by harnessing technology through partnerships that support the enrichment of client’s lives through clarity and efficiency. Seeing the advice (not product) process streamlined, removing complexity to deliver a compliant client experience, not a compliance experience imposed on a client.
We are seeing positive movement towards this goal in the broader financial services sector. Bigger industry players who traditionally employed a one-size-fits-all, tied-agency approach to advice delivery to its customers, now unveiling a re-jigged ‘back to the future’ business model allowing advisers the opportunity to be self-licensed and to own the client relationship.
It may have taken decades to catch up, but these shifts are a welcome development to refocus on the client at the forefront of their activities and best interest duty.
CHOICE AND DIVERSITY ARE OUR STRENGTHS
Placing choice back into the hands of the adviser through the provision of flexible business models is an integral part of the re-think required. Attracting those who value the role of being a family chief financial officer – what our firm calls the lead-adviser role – is about offering the choice for an adviser to take on that client-centric place of trust.
We talk often of examples where advisers ‘conduct the orchestra’ on behalf of clients, engaging other specialists and services with a best of breed ethos to get the job of enrichment done well.
Diversity is vital. It is not just a question of gender diversity, it spans a wide spectrum of human experience, ethnicity, religion, and other life factors. But I want to pause on this point and discuss the importance of gender representation in our profession.
This discussion is perhaps overdue, and, whilst I see some promising green shoots, I believe it is vital that our re-imagined profession has a healthy perspective on the value that a more balanced gender representation brings.
I get asked often: How do we attract more women to advice? It is an excellent question, and the truth is I can already see in our network the emergence of a strong female adviser cohort, offering specialised advice to clients who seek a female adviser from a profession where women are traditionally underrepresented.
A wonderful example is a fabulous cohort of women within Fitzpatricks’ – they fondly refer to themselves as the “Fitzpatricia’s”.
This is an organic alignment from a group of professional females – supporting each other as they strive to provide specialised advice and client enrichment. It is also another fine example of advisers getting back to what they love. Encouraging purpose, growth, and collaboration through the sharing of ideas and inspiration.
THE CHALLENGE FOR US ALL
The opportunity today is to look within and define what the future looks like for quality advice in Australia. The mindshift we encourage is akin to self-care. How do I get back to being the adviser I want to be, doing what I love and living my best life?
The entire sector operates within a framework of imposed controls, standards, and regulatory obligations.
But it does not mean there is no room for innovation, renewed purpose, greater choice, and diversity to help our sector to self-direct what the future profession of financial advice looks like and is valued by clients.
Above all, to create a profession that acts to truly enrich those who do the work of life enrichment every day.
Jodie Blackledge is chief executive of Fitzpatricks' Financial Group.
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