The Royal Commission. It was bad for the reputation of the advice industry and the effects will last for some time yet. As with most things, a few bad apples make it harder for those doing the right thing but there has always been a lot of good in the financial services industry. The community as a whole needs advice and that advice does need to be more affordable, more on that later.
Advice is making a comeback
When the Royal Commission was in full flight it was very easy to be very judgemental and cast an untrusting eye across the entire industry when that just was not fair. It is probably also reasonable to say some were caught out by some legacy systems and processes, no ill intent to mislead or overcharge clients. Anyway, it is not my intent to summerise or regurgitate the Royal Commission. The findings have been handed down, and we are all moving on. There has undoubtedly been some pain, but the financial services industry will be more robust for it.
Advisers are very resilient, but they have had to be, it is very sad and unfortunate that many have left the industry in the last 18 months because we need this profession now more than ever.
Every adviser that I have had a meaningful conversation with over the last twenty odd years believes they can add value to their client and to help with their clients short, medium and long term goals.
Advisers in my experience love to listen, plan and strategise to improve their client’s overall position, many of their clients end up becoming friends and that is the underlying nature of advisers wanting add value by taking an interest and caring.
There has never been a more critical time for the advice industry to want to save time
All advice professionals, such as Financial Advisers, Insurance Brokers, Mortgage Brokers, Accountants, Lawyers are going through an incredibly busy time. Not only do they need to manage changes to their own business they are helping their clients in an unprecedented way. Advice professionals are answering calls about investment volatility, cash-flow issues, premiums, bushfire recovery, business interruption, government hand-outs, payroll issues around job keeper, BAS lodgments, contract disputes and record low-interest rates to name a few.
Your clients need you!
Advice is paramount in these difficult times for everybody. The recent bushfires and global uncertainty due to the COVID-19 crisis have made the Royal Commission seem like a mere speed bump for some. The advisers that have survived the Royal Commission and regulatory change are now imparting their knowledge and care to clients like they always have.
Right now, the advice industry is in demand.
I believe the rise in demand for advice during COVID-19 is putting the negativity of the Royal Commission behind us.
A positive to come out of all of this is seeing the way our communities can work together and help each other in times of need. We have seen doctors, nurses, emergency services, teachers, supermarket staff, essential services personnel, and even our politicians really step up during a crisis.
Our advice professionals have certainly stepped up too. Many advice professionals are working seven days a week to keep up and help clients in these extraordinary times of need.
What is the true cost of advice?
We often think of this term or this cost as the amount of the fees we actually pay to advice provider for the advice. Rarely do we consider the cost of NOT implementing the advice and the effect that would have on our short, medium or long term goals. We should also consider the immediate tax minimisation benefits from having the right advice or the value of purchasing the right property and having the right loan.
So when you measure the cost of advice and whether or not you can afford it, you really should consider all of the benefits received and the cost of not taking any action. This impossible to do if you don’t first seek advice or at least talk to an advice professional where some of these scenarios can be projected. Hindsight we all have 2020 vision, we are all experts when we can look back and ponder what could have been.
So if we are to totally understand the question, the true cost of advice is the benefit minus the advice fee, so the actual cost of advice is negated, and it is a positive investment that is gained by higher returns, tax efficiencies or insurance. It’s a bit like placing solar panels on your roof. You outlay an installation fee and enjoy a long term benefit and a higher valuation of your property.
Is advice back in vogue?
Sure is, once upon a time, it used to be a “status” conversation dropper if we dropped into a conversation “My Financial Adviser” bla bla bla… your friends may think that you are doing pretty well financially. Industry respect is returning and advisers will be remembered for the advice they provide and the difference they are making in people lives.
The perception was that you needed to be wealthy to see a Financial Adviser but we know that is not true. The reality is that people now seek advice to create, enjoy and protect a better financial position now and into the future. You simply need to see a Financial Adviser if you believe you can do better or importantly want to do better.
I take my hat off to Advice providers. You are doing an amazing job for your clients during unprecedented times as well as trying to run your own business.
Last month I wrote an article about taking the time to Pause, Reset and Outsource. In this article, I included some tips on taking a more digital approach to gain some office and business efficiencies.