Wednesday, December 30, 2015

Financial Planners - Social Media One Good Investment To Make Now

"The newest paradigm shift in financial planning 
is being driven by the emerging trans-generational wealth transfer
 - the largest in history."  

Some interesting numbers fell across my view this week, which should be of interest to any financial advisor.

These numbers from the US would probably be a close match for the experience in Australia too, though many US businesses are in front when it comes to client servicing standards by comparison.

  1. 2% of children inheriting stay with the parents' financial advisor
  2. With the death of their husbands, only 45% of women stay with the current financial advisor.

What does this mean for financial advisors? It's vital to learn to build strong relationships or risk losing out in the coming avalanche of inter-generational transfer of wealth that is about to unfold.

What we want from our financial advisors

Here's what one recent survey in the US found about clients' views on what's important to them. This is the response according to an article on Forbes

“The CFA Institute & Edelman Investor Trust Survey.”
The survey asked respondents which of the following factors was the most important to them in selecting an investment manager (while the question in the survey related to investment managers specifically, but I would argue that the results are relevant to advisors and other industry participants as well):
  • Trusted to act in my best interest – 35%
  • Ability to achieve high returns – 17%
  • Commitment to ethical conduct – 17%
  • Recommended by someone I trust – 15%
  • Compliance with industry best practices – 8%
  • Amount/structure of fees – 7%
By more than 2 to 1, more respondents felt that the most important thing to them in picking an investment partner is that they feel that they can be trusted to act in their best interest. Returns were less important, and fees were at the bottom of the list."
We can see from this that trust is a big factor for clients. That should come as no great surprise and yet if we look at the focus of activity in the financial services industry, there is little that is remarkable in service standards that would lead us to have any great trust in one firm over another.

Building relationships just doesn't seem to be a priority for financial planners and financial advisors, whose focus is often on rate of returns, fees and commissions.  To gain trust, matching priorities needs to be demonstrated.

Doing The Right Thing

From this we can see that ethics is important to clients. They want to feel that  they have placed their trust in someone whose behaviours they can reasonably expect will follow the client's best interests and that the advisor will be sufficiently in tune with their wishes and investment style to recommend products and strategies that take into account the wishes, capacity for financial resilience, temperament, aspirations, wider goals and the risk management needs of the client.

 What does ethical and professional financial expertise look like?

Financial advisors don't just need to  be professional and have high standards of ethical behaviour. They need a way to show that. How do customers know how this plays out in your business? How do their friends see that this is an important issue to you and how you run your financial planning business? It is in our actions that our values play out. It is the topics that interest us the standards we hold for ourselves, the public platform we develop to showcase these aspects of our professional and personal identity as well as the services standards that we set in place within the business.

Establishing Trust

We love to be really heard. Talking less and listening more is a good start. But it is not enough to just listen, we need to also carry that through to understanding how that fits into a broader context. So listening is not very useful if what we are told is not translated into the plan that is to be implemented.  This is an element of what we could call 'ecology' and should be consistent not just with the words spoken, but the beliefs and values behind the words. Listening is one step in the process. Clarifying and assuring you know what that means to the customer, is the next step to the really important end stage - understanding.

We Do Things Differently Now

While conservative establishments like financial planning companies have established ways that things get done, all of which are likely to be convenient for the financial houses,  not necessarily so for the customer.

Customers are not standing still. Technology is putting information as close as their fingertips and they don't want to hang around for yearly statements and feedback when they can now access other things they need in real time. The old business models will have to change and become more convenient and accessible for clients.  That's also key to streamlining processes and opening new means using technology to find additional touch points to stay in contact with clients, be of value to clients and establish your relationship with them as being a useful addition to their life.

Leveraging Time and Information To Create And Post Quality Content

Technology, social media platforms like Facebook, Twitter and Linkedin, blogs, instant message and SMS text services can all help to make life more simple and functional and save time for advisors and clients alike. Maintaining contact in the ways that are most beneficial and wanted by the client is also how you show that you have listened and heard what they want when it comes to how they want to work with you.

While some aspects of service can be automated and direct, when it comes to public methods for informing and educating around financial matters, this can be in your hands as the trusted advisor, for both clients and others in their network who could become clients in the future. But this can only happen if you have the means and have developed the resources necessary to be a visible as the credible expert and trusted industry authority.  When that happens you are placed well for them to turn to you as their first and most reliable source when it comes to matters of a financial and life planning nature.

Where To Start 

Begin with forgetting your assumptions about what you think you know about your clients. The chances are that what you think about your client base is not right. Those clients you think are your best clients may not be any more. And those "C" grade clients you have not seen for years - could be someone else's "A" grade client ... or will be in the future.
  • Begin with a good analysis and review of your client base. This cannot be just on fees, but needs to be assessed using a range of metrics that are objective and subjective and take into account the lifetime value of a customer to your business. 
  • Audit your current method of servicing customers
  •  Map the current servicing strategy in diagram form 
  • Check metrics on rate of business lost  
  • Identify bottlenecks in the service delivery area  
  • Quantify system for and metrics for new business acquisition   
  • Quantify lost business and system reporting method  
  • Diagram customer feedback system  
  • Review marketing plan

That's a good start. Each of these areas will take some digging to get the information you need to fully understand the present situation.

The next step from there on is to develop your plan what you want to achieve in the future term and how to go about proceeding to What Happens Next.

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Sunday, December 13, 2015

Beware The Doghouse. A Christmas Message

This post comes as something of a Public Service message I think.

This video says in a few minutes what we could not say in a lifetime to our loved ones. For those with a partner who lacks the gift of comprehending social nuance, this is for you. For the sisters and mothers of people who lack this same skills set, please pass it on. To your young men, please pass it on. Fathers with sons... pass it on (but watch it first!).

A Happy Festive Season To All

And To All... A Good Night.

(Not In The Doghouse!)


Update: The Doghouse Sequel.

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Lindy Asimus
Design Business Engineering

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Wednesday, December 09, 2015

Working For Promises

It's an interesting world in which we live.Changes happening every day to the way we work, the way we get remunerated and the way we use media and technology.

While industries employ weasel language to talk about "flexibility in the workforce" what they mean is casual jobs and no benefits.  Contracts replace employment and many jobs lack the security of employment that can allow the person to plan ahead, borrow money and invest in a home. This group which is growing by the day has been called The Precariat - for the precarious financial situation in which they find themselves.

"Millions of people across the world, including many Australians, are living and working in economic and social insecurity, many in casual or short-term, low-paid jobs, with contracts they worry about. Their incomes fluctuate unpredictably, they lack benefits that most people used to take for granted.

No paid holidays, no sick leave, no subsidised training, no worthwhile pension to look forward to, and no assurance that if they lose their job they will be able to rely on state benefits or other assistance." - Guy Standing is the author of The Precariat - The New Dangerous Class (Bloomsbury) see more on that here in this article on The Drum

Naturally in such a world, retirement funding is up to the individual and we know from experience in Australia  prior to compulsory superannuation and in the US (where retirement benefits were changed in the 80's to allow employers to only match contributions from employees) that many people will not put enough money aside (nor be able to afford to) nor be able to retire since they will have few resources to depend on, aside perhaps from a windfall legacy when their parents die.

Similarly, the technical world is full of sage advice on the new paradigm and how people will be moving from job to job expressing their skills and running their career as "my personal business".  This is an attitude that we will have to cultivate but we're not there yet. 

Part of that techno wonder is the miracle of the start-up where people can be promised big bonuses when (If) 'the ship comes in' and the company gets bought out by a mega player. Meanwhile they can graft away on a subsistence pay - or work for basically nothing.  Since most start-ups are likely to fail, many will put in the time and at the end have a very expensive lesson to show for it. Some interesting perspective on this fact is outlined in this piece "Advice for US Entrepreneurs Who Move to Europe" on the difference between the US and Europe when it comes to start-ups. In Australia you can figure the conditions are most like Europe than the US. Bold highlight is mine.

"Another legal obligation that is very common in Europe and unheard of in the USA is state-mandated severance pay packages. This is a direct impediment to start ups, the reason being that most start ups fail and in the USA there is an understanding of this. In the USA employees demand stock options as upside should the start up succeed knowing that there will be no severance package should the start up fail." 

Then there is the virtual sweatshop model that is growing apace, where you contribute your writing, your creative pieces and don't get paid. Oh, yes you will benefit, you're told, by "all the exposure" you'll get.  Meanwhile if the business takes off and the owner sells it for a bundle, that's going in their pocket, but never yours. That exposure? Probably worth very little in real terms. 

Illustrators who have been working professionally for decades are struggling to find work. Where then will the work come from for all those following who are studying visual arts and joining the list of people looking for that creative work? Well there are sites that promote "Freelance" jobs - where you can pimp yourself out in competition with those in third world countries where $10 a day is possible to live on. 

Harlan Ellison is a very good and famous author who had something fabulous to say on this matter. He's 'paid his dues' and still yet the hucksters will try it on to get work free. Here's what he thought about that. 


So what is the way forward? 

It seems that the system in which we work will need to change to accommodate the new less-that-full-time workplace. Perhaps decoupling benefits from employment so that they accrue the same way that superannuation and retirement savings do, and are portable from job to job. A change in the way that banks approach lending for people in this new workforce and perhaps an additional payment made to those who are not regular employees.

It's definitely a topic that needs to be on the agenda for discussion because it is likely to affect every family, and living well in this new environment is going to depend on having a well considered and implemented plan to deal with the issues that pertain.

Working for promises? That's a mug's game. 
Don't be a mug. 


With the growth in social media platforms many have a huge following personally - but that doesn't translate into job offers or financial reward.

Like this article outlines...

"The restaurant was hosting Buzzfeed’s Golden Globes party. For the past two years, Ashley has been one of the most visible actresses on the company’s four YouTube channels, which altogether have about 17 million subscribers. ...
The awkward part was that Ashley wasn’t there to celebrate with Buzzfeed. She was there to serve them. Not realizing that her handful of weekly waitressing shifts at Eveleigh paid most of her bills, a coworker from the video production site asked Ashley if her serving tray was “a bit.” It was not.""
The disconnect between internet fame and financial security is hard to comprehend for both creators and fans. But it’s the crux of many mid-level web personalities’ lives. Take moderately successful YouTubers, for example. Connor Manning, an LGBT vlogger with 70,000 subscribers, was recognized six times selling memberships at the Baltimore Aquarium. Rosianna Halse Rojas, who has her own books and lifestyle channel and is also YouTube king John Green’s producing partner, has had people freak out at her TopMan register. Rachel Whitehurst, whose beauty and sexuality vlog has 160,000 subscribers, was forced to quit her job at Starbucks because fans memorized her schedule.
In other words: Many famous social media stars are too visible to have “real” jobs, but too broke not to."  Read the full story here: Famous and broke

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