Why Dirty Harry wouldn't win a Gold Medal

by Tony Vidler.

One of the great movie lines spoken by the character Dirty Harry was "a man's got to know his limitations".  A line which always seems to apply to financial advisers.

But this doesn't apply to Olympians does it?  

I am captivated by the incredible achievements of humans that is demonstrated at the Olympics, and their ability to continually re-define their (apparent) limitations.  

You cannot help watching them, admiring them, and then wondering how you can apply what they know and do, to the non-Olympic and mere-mortal world we live in.

At the London 2012 games 2 athletes standout for me personally, on the basis of how they continually have re-defined their own expectations (or self-limitations).  

Michael Phelps must be considered one of the greatest athletes of all time, and his record is remarkable.  The second athlete to stand out for me is also a swimmer - who did not win a medal.

Lauren Boyle, from New Zealand. What a remarkable young lady - and the epitome of a "champion".

She came 4th in the 800m freestyle final.  But to get there she had to continue, race by race, to swim faster than she had ever swum in her life.  Breaking her own national records to get to the final, and then under the immense pressure of the final of an Olympic glamor event, she lifted another notch again.   And at the end of the race, was she upset at getting 4th?  Not on your life...she recognized that she had challenged her own beliefs, re-defined her apparent limitations, and found a new confidence and performance level.

So what do Lauren & Michael Phelps have in common?

Well, they both have a coach that they listen to and learn from.  They apply process and systems to enhance their training and "professional development".  They take advice from their mentors.  It is up to them to put that advice into action and performance though.

According to a study of Olympic Champions here are their common denominators for success:

Characteristics of Champions

  An ability to cope with and control anxiety.

  Confidence

  Mental toughness/resiliency

  Sport intelligence

  An ability to focus and block distractions

  Competitiveness

  A hard-work ethic

  An ability to set and achieve goals

  Coachability

  High levels of dispositional hope

  Optimism

  Adaptive perfectionism

Source:  Psychological characteristics and their development in Olympic champions.

Gould, D., Diffenback, K., & Moffett, A.

If you want a self-improvement checklist of things to work upon, you will not find a much better list than this one.

On this basis, would that excellent pistol shooting Dirty Harry have got a gold medal?  

I don't think so...at the very least because he wasn't too "coachable", or open to learning.  There are a couple of other attributes that he didn't share with the Olympians either, and we can't overlook his tendency to adopt a cynical "me versus the world" attitude combined with a mindset of "my way is the only way, and winning is everything".  Brute force as a method of problem solving also has its limitations too I guess.

What led me down this line of thought in recent days is the realisation that there are more business owners like Dirty Harry than there are business people thinking and behaving like Olympians.

Champions challenge themselves, and are continually focused on incremental improvement, open to new ideas and learning, and reinforce all they learn with sheer hard work.  

Any professional advisers or professional service firms looking to develop or just get business ideas and inspiration should think about adopting the mindset of an Olympian rather than Dirty Harry. 

You don't have to actually get a gold medal or be first in the world to be a champion.  You only have to have seen Lauren immediately after NOT winning a medal to realise that.

 http://www.3news.co.nz/No-medal-but-still-glory-for-record-breaking-Boyle/tabid/1706/articleID/264158/Default.aspx


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The 6 P's of sustained peak performance

 by Tony Vidler.

How to stay on top of your game, get the results that you want in business, and maintain peak performance....it all comes down to having a system, or a process.

The formula is - like all good things - a simple one. 6 P's become your process, and lead to sustained performance, instead of the frequent ups and downs of business that can be so demoralizing and stressful.

It all begins with marketing of course - and marketing is the main thing. I recall hearing from Winston Marsh once that "you have to be a better teller of what you do, than a doer of what you do". He is right - it doesn't matter how good you are if nobody knows it. And they won't necessarily come and find you just because you are great - unless you are one of the absolute elite at the top of the game with a truly international reputation and strong personal brand. But even those people are constantly marketing...

The point of this system is to stay focused on the daily activities that create value and generate business. It is a cycle that doesn't stop. And it all begins with marketing - every day.

Promote:
Marketing should be a daily activity, not just an annual think-tank & planning session. Apply the strategy daily, and keep sending the message out to your target market continuously. For example: if your primary marketing strategy is to establish credibility and authority in a particular market niche and dominate that niche, then they need to see and hear from you continually - you have to be the voice that is listened to. A daily routine of providing content via Twitter and Facebook (both aimed at your target market), supporting your content and positioning on LinkedIn, might be your daily "promotion".

Produce:
The next most important thing is to generate revenue. Constantly. It is the next most important focus, and you must be doing that, and working upon doing more of it, daily. No matter how nice the fee or commission for any particular piece of work, it will be gone in no time. (I've seen many spend it twice - the day they make the sale it is often spent in anticipation, and then again on the day the revenue actually arrives). You have to keep selling. Marketing isn't enough, as that just provides the opportunity to sell. Selling gets the dollars in the door - it needs constant focus. You might do this by ensuring that you are in front and presenting to "x" number of people per day.

Pitch:
You have to continually top up that sales funnel. There is no point in having a heap of well qualified prospects that you are not doing business with, and there is even less point in not doing business just because you are worried you will use up all your prospects. At a personal level - the prospecting part of any sales process - you have to be pitching daily. Pitching just means "tell your story" to people - not corner them, or try and sell them straight away. You know that the best clients come from a well established, trusted relationship, and that can only be built over time. Take the pressure out of the business by ensuring that you are talking to people each day who will be future clients - not today's sale. You might do this by ringing and talking to to "x" people per day who are at different points in the sales or relationship building process.

Process:
Look for an area to create just a little efficiency within your business each day. aim for 1% improvements daily - not giant leaps forward. Incremental process improvement is easy, and far more quickly than you would think it leads to a very efficient business machine. It is the same approach as the ant trying to eat the elephant....just one bite at a time. You might do this by standardizing one letter, or paragraph for reports, each day that you can use continuously to save time or make the job easier in the future. Keep building and refining proceses for a more efficient business.

Perfect:
Work on the business, even if it is just a little, each day. Some time with the staff, the key suppliers, the centres of influence, the financial management, analysis of marketing efforts - there are so many things to do and continually work on in building a great business. Work on it constantly in easily digestible chunks (remember the ant and the elephant? it is the same principle). The goal her is not "perfection", it is about continually perfecting and refining.

Plan:
Every day, review the activity plan. Not the business plan as such, but work the diary for the days, weeks and months ahead. schedule the work, know who you are going to call, know where you are going next.

...then get on and promote....

This simple daily routine will keep the wheels turning in your business, and ensure that all the important components in building a great business are being worked on - while keeping the revenue coming in the door.

Attaining peak performance is simply a matter of having a good process that focuses your time and effort in the right proportions on the right things. Then being able to get into the routine (habit) of applying it.


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Good news: Regulators DO trust some advisers

by Tony Vidler.

Should Regulators trust some advisers to do the right thing? Or none of them?

This is the intriguing question which will be debated behind closed doors in NZ in the immediate future I am sure, following the latest round of financial services reform in Australia. The "Future of Financial Advice" (or FoFA as it has become known) has been a work in progress for three years, as Australian regulators do their latest bit to drive higher standards of client care and professional standards in their market.

Naturally there have been a number of contentious points there, and the usual mix of good intent mixed in with impractical rules, that have created debate and strong lobbying along the way.

One of the more contentious proposed rules from an advisory perspective has been the "opt-in" provisions. As is often the case, the rule-drafters have been driven to solve a genuine industry flaw (that of consumers paying ongoing costs for advice and/or service from within product fees or commissions, without necessarily being aware of it, or even receiving advice or service from those receiving the money). The method they chose to resolve the problem though was impractical, unfair and a logistical headache for adviser firms to implement - in the industry's view.

"Opt-in" requires the adviser to obtain periodic ongoing written consent from clients that they want the adviser to continue the relationship and receive agreed remuneration.

In principle that seems a fair thing. Though in practical terms everybody knows that consumers are just humans, subject to the same whims and emotions in general terms. The levels of client satisfaction and desire to stay the course with anything can be driven as much by the state of the economy or investment markets, whether we won the Rugby World Cup, or whether our boss is a complete twit, as much as whether the adviser is doing the job that they agreed to do in the way it was agreed to be done.

Logistically, the seemingly simple matter (in theory!) of getting the clients to confirm in writing once per year that they are happy to continue paying fees for ongoing advice, would be difficult. People are busy, and just forget to follow through on things. People go away, get sick, or just don't open their mail for weeks at a time. Clients - believe it or not - are often re-investing funds or sticking with the same product automatically year on year because they didn't bother to read a letter in time. And of course included within the "opt-in" provisions was a big stick for the adviser who did not obtain the written client consent within the required timeframe - meaning that it would become far too dangerous for an adviser to continue receiving fees or carrying on the relationship if that written consent was not obtained each year.

Logically one would have to expect that over time advisers would be having to disengage from otherwise happy professional relationships simply because they had not obtained the required consent at the right time in any given year. That cannot be a good outcome for consumers generally.

After much lobbying and debate, the opt-in provisions were amended to a 2 year period, instead of being an annual requirement. That change was an improvement to be sure, but all the flaws with this method of achieving client consent and aligning the professional obligations with consumer benefits remain.

In the last week though there has been an interesting twist. Interesting - and beneficial - for those advisers committed to working to the highest professional standards, and who are willing to pay the price to do so.

It should send a shiver down the spine of the many advisers who do not belong to a professional association, or who think they are fine just motoring along obeying the basic rules of the road that the FAA delivered.

Why? "Opt-in" passed, and has been included in the legislation in Australia. What happens there - particularly in terms of improving the immediate consumer experience in financial services - will influence regulators thinking here.

The really interesting point though: there is an exception to the opt-in provisions in Australia. The exception is that financial planners (in the widest sense) who are signed up to an approved professional code of conduct managed (with rigour) by a professional association are given a class exemption from obtaining the opt-in consents from individual clients.

In plain english: if you are an adviser who belongs to a genuine professional association, with high standards and the ability (and will) to enforce them, then you are trusted to do your job well and are relieved of some of the rules aimed at fixing the cowboy end of the market.

This is an excellent outcome for the many thousands of advisers who have invested in higher education, voluntarily operated at higher standards than the laws required for many years, have exposed themselves to the risks of getting it wrong in working to the highest standards - and who have demonstrated their commitment to doing their work as best they can.

This principle of applying tough rules across the market, yet providing class exemptions for segments of the market that have already demonstrated they have earned the right to self regulate to a degree, is sensible and practical. It is also the best possible method of ensuring that advisers who do operate on the fringes in terms of the business practices or standards become aware that there is actually real business benefit in voluntarily operating at higher standards than the minimums required by law.

We can only hope at this stage that this principle gets imported from Australia - that there are ways of raising standards generally, while recognising and trusting those who have already demonstrated their willingness to work at the highest standards. That would be good news for the local market.


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How to do it in 3D (Marketing that is...)

 by Tony Vidler.

Advisers typically are focusing their attention on next years marketing refinements about now.   Rightly so, as marketing is everything. The only thing that gets in front of marketing your business is the hand to hand combat of acquiring actual paying customers.

When talking about the issues with advisers it seems they often see marketing as being one of two quite different things - and neither are entirely right. It is either something "strategic" and broad and slightly fuzzy, that is about business branding, positioning, look and feel of a business - the what it looks like and stands for aspects.   The focus inevitably turns to having a clever logo and tagline.  Of course marketing is partly about that.  Alternatively they think of marketing in a much more narrow sense - oftentimes confusing advertising and sales tactics as BEING the entire marketing plan. A point that is often lost in the adviser thinking is that marketing and selling are quite different things, with quite different purpose and with quite different skillets required. 

So a quick recap:  at it's most simple level, Marketing is about creating the opportunity to sell. Sales is about converting the prospect (opportunity) into a customer.  Marketing is about how the battle is to be fought and deploying the right resources, in the right place, at the right time and in the right way to achieve the objectives.  Sales is hand to hand combat, and is where all the smoke and explosions and noise are.  To consider the entire marketing strategy then one has to step back from the cut & thrust of daily business.  

When it comes to marketing strategy for professional services firms it is usually considered in a single dimension. An enormous amount of time and effort is spent trying to differentiate the business and make it mean something in a prospective customers mind - but only in the context of making it look different to every other business promising the same thing.   Financial advisers make a lot of effort to try and look different to other financial advisers - whilst offering the same core value proposition, delivered the same way, to the same target market as their competitors.  The result is they are trying very hard to look different while trying to look exactly the same. (check out the postscript for an example of this!)

What if you thought about marketing professional services three-dimensionally though?

In the 3D marketing mindset there are the dimensions of breadth, height and depth.  Your marketing thinking should extend to all 3 dimensions, and consider strategically how to use all the dimensions.

Breadth to a large degree is about considering the stuff that consumers expect you to do.  It is about your expertise and range of services. For example, the consumer clearly expects the financial planner to be able to do financial planning, and all that involves. The insurance broker is expected to be able to broker a risk management solution. So on one level there is the element of simply having to position your business to meet the basic expectations of the consumer.  In this space there is still opportunity for your marketing to promote differentiation though while doing what is expected, and sought, by the customer. This is where having a strong Unique Selling Proposition (USP) can be effective, or where broadening the services and expertise that get delivered alongside the basic expectations can add value and enhance your brand. The thinking around breadth of offering is how to add on services & skills that are valuable to the customer that they didn't expect when first comparing the market.

Even if you do not extend services or have a USP that customers can place a value upon,  your marketing and brand can be enhanced by building upon your core services through continual improvement or refinement of expertise.  That is building upwards - doing the same things as everyone else, but being incrementally better at each piece of what you do. Being technically stronger, having (and showing) a greater understanding of particular market niches, providing better advice results than others in the same space, stronger/better professional standing, operating to higher standards voluntarily and so on are examples of building your brand and offer to higher levels, whilst still competing in the same broad offering that the competition do.   The basic offering is similar to competitors - still doing the financial plan or finding the right risk management solution - but having better expertise or solutions choices, or providing more consumer certainty and safety than competitors, and being able to demonstrate it.

The third aspect is not often considered as part of the marketing strategy, as it tends to get put into the "service" category. The depth of the customer experience is a vital element of the overall marketing strategy.   At one extreme there may be a business model where the customer relationship is utterly superficial and transactional (think of direct insurance sales online: nothing wrong with it but the business model clearly doesn't provide for or offer any real depth of customer experience).  At the other extreme is the adviser (I know of) who has roughly 170 high net worth clients around the world, with himself and 6 other people (together with outsourced experts) providing the highest level of personal service and personalized financial solutions possible to the chosen few. And their clients pay a lot for that personalized financial planning expertise.  The depth of the customer service and level of personalization are themselves competitive points of difference that are integral to their marketing strategy.

So when thinking through and revising the marketing plan for the next year (and beyond), think about doing it in 3D. Have a clear strategy that covers how you will be positioning yourself in the broader market, and how you will be able to differentiate in the first level of competitive choice. Then have a solution on how to build upon those base expectations in such a way that it provides higher value or greater safety for the consumer that they did not initially expect when first comparing their choices. The depth and quality of the customer experience when engaging you (not just the "after sales service") is a further critical element of the overall marketing strategy.

If you can combine all the elements into a 3D offering you will be able to create a "WOW" customer experience. And people pay more for, and stay longer with, superior performers who exceed their expectations.

(P.S. I thought I'd check out how imaginative professional service firms in New Zealand get with their naming & branding....here's a snapshot. The number of companies using the following words in their name just in little old NZ:

Services - 43,155

Consultant - 18,710

Solutions - 10,953

Associate - 8,554

Financial - 3,450)


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The challenge of Kiwi DIY for Advisers

 by Tony Vidler.

Some telling research was done by Dr Claire Matthews of Massey University that highlighted the Kiwi DIY (Do It Yourself) mindset, and the challenges that poses for financial advisers. 

The research was specifically on "KiwiSaver and Retirement Savings", and explored some of the issues and attitudes of Kiwi's. 

While the research was KiwiSaver focused, it raised issues pertaining to financial advice in the wider context.

Retirement savings are clearly a major issue for the nation given the current projected population changes will have 1 in 5 New Zealander's over the age of 65 by the year 2031.  In 20 years then a fifth of the population will be retired, or contemplating imminent retirement.  So what was revealed?

In brief, what came through strongly was the "reluctance to make use of financial advisers, with the advice of family and friends often preferred".  A mere 4% of those surveyed indicated they had joined KiwiSaver on the basis of a financial advisers recommendation.  Interestingly though, some 11% indicated that their choice of KiwiSaver provider was recommended by their financial adviser.  Clearly a proportion are joining KiwiSaver before seeking advice it would seem.  But more are joining and still not using financial advice.

Perhaps the adviser is unnecessary?  High proportions claimed alternative investments of some significance, with nearly 28% claiming to hold investment property, and over 45% were holding cash and/or term deposits.  A further third had workplace super schemes already.  Presumably mostly all done without financial advice also.

Undoubtedly the big motivator for the DIY investors as far as KiwiSaver is concerned are the scheme incentives.  Some 28% cited "getting the government incentives" as their primary reason for joining KiwiSaver in the first place.  The features of KiwiSaver then rated as important by the consumers had nearly 90% claiming the $1,000 kick-start as an important element, followed by about 85% or so saying the ongoing contribution tax credits were important.  A little further back some 80% claimed the employer contributions as important, and a long way behind that the first homeowners subsidy was deemed important by about 30% of members.

 

This is all interesting perhaps, but the big question is what does it mean as far as the role of the financial adviser is concerned?

KiwiSaver has critical mass, and it is here to stay.  Retirement funding is a looming societal issue, that will not disappear anytime soon.  The Kiwi DIY attitude is a significant factor already, which further challenges the issue of advisers being able to charge directly for their expertise. Add to that, pressure to lower costs, commission and charges of any form within KiwiSaver schemes will only increase in the short to medium term.  So there are undoubtedly issues for financial advisers to work with and resolve.

The truly significant challenge presented to advisers however is that largely they are not even considered a primary source of information on financial matters.  Note I didn't say "source of advice", but a source of information...

As the main source of information advisers are rated number 1 by about 19% of the surveyed population.  Nearly the same as was "books, newspapers and/or magazine articles".  Well done us - we are more informative than the local rag to the public on financial matters!  Just.

Some 27% are sourcing most of their financial information from friends & family, and a further 17% sourcing it directly from the internet.  I'd suggest that as content marketing increases, the internet's proportion as a primary source will rise - probably at the expense of both advisers and newspapers.

There are clearly a number of challenges for financial advisers, not least of which is how to make money (if at all) from advising upon KiwiSaver.  Most importantly, the big challenge presented by the Kiwi DIY approach shown within KiwiSaver so graphically is that we first have to establish ourselves as the primary reliable and credible source of financial information to our prospective and existing customers.

Before we can attempt to work out how to provide KiwiSaver advice in a commercially viable manner, or even before we try to convince the market on the "value of the advice component", we actually have a credibility issue.  The hard yards have to be put in to establish the financial adviser as the primary information source.  Then, and only then, will there be sufficient people willing to consider the value of your advice.  Then there might be a chance of putting together a viable business proposition around advice on KiwiSaver.


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Why your "FREE" service is a barrier to business

by Tony Vidler.

Most advisers at some point offer initial meetings, or consultations with clients, for "free".

The fundamental reason this just doesn't cut it with consumers is that they don't believe the advertiser.  It simply isn't true, and that will stop business coming your way.

Even at the institutional end of town we find businesses advertising their services as "free" to prospective customers, and most advisory practices fall into the trap at some point.

The first rule of professional marketing should surely be "tell the truth", in which case we should be advertising the initial-no-obligation-meeting as being "at my cost".

Nothing we do in business is free, and consumers do not believe for a moment that they are getting anything from us for nothing.  If it doesn't have an obvious price then there will be a hidden one, right?  If that is the case then the very first thing you have created with your advertising is distrust on the part of the potential customer - and that is a barrier to doing business.

It makes no sense to put a trust barrier up to begin with, and particularly not one that is so patently transparent.  All the initial effort by the adviser in any customer relationship is focussed on establishing rapport, trust and credibility.  Yet advertising yourself as free undermines the entire process.

Be honest in your marketing.  While being honest lay the foundations for a truly professional relationship that is based upon trust from the outset, and which clearly values your expertise.  There is a harsh conclusion for the advisers sold on hiding behind "free" - if the adviser cannot place value upon their expertise right up front, why should a consumer?

So instead of telling the world that your expertise of services are "free" at the outset tell it how it really is.  As a professional adviser you provide no-obligation (on either party) initial meetings "at my cost".  It isn't free.  Using my office, is at my cost.  If I come to you, that is at my cost.  Sending you the pre-meeting material and disclosure information?  That is at my cost too.

It is not at "no cost".

Offering information and providing the time and resources to potential customers at the outset is a marketing expense to the advisers business.   Why try to hide that?

Give yourself the right professional positioning at the beginning of a potential engagement.  It makes perfect sense to offer an introductory meeting at no cost to the potential customer.  A no-obligation meeting to begin with makes as much sense for the adviser as the consumer.  There are some consumers you just cannot, or don't want to, help.

There are very few potential customers who will ever truly value you and your expertise if the business relationship cannot begin with you valuing yourself.  Advertising yourself for free will prevent the type of business you want coming your way.



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