Because advice matters
FAnews recently attended the Old Mutual roadshow where a number of speakers addressed a packed audience on the value of advice and the importance of advisers.
The predominant theme on the day was the role that advice plays in the success that certain people find in life. It was also illustrated that success is relative and that not every person can be a successful business executive or sportsperson; but if advisers can offer clients the best products to suit their changing needs, it counts as a major success.
An important conversation
The event was opened by Dave Macready, Chief Executive of Old Mutual, who gave his insight into the industry and the important role of effective advice.
Advice matters and therefore we should be open to talk about matters of advice. However, this can be daunting for humans as it is in our nature to be shy and to not ask for advice because it may be seen as a personal admission of failure. But where would we be without advice? The simple answer is nowhere because if we assume that we are where we are today without advice, it would mean that we have journeyed through life alone.
So how do you approach the sensitive topic of starting a conversation regarding your client’s financial wellbeing? “It doesn’t matter what is happening in your life or who is in the room, the most important thing is to be true to yourself and to trust yourself that you will be giving the best advice possible,” said Macready.
He added that in order for advisers to be successful, they need to fundamentally know where they have skill and where they do not have skill. They then need to take the skills and harness them in order to offer a competitive advantage over other advisers in the industry.
“Make advice your competitive advantage. Make it part of your vision. Customers both now and in the future will need advice and it is integral to their future success,” said Macready.
The rising market
Over the past few months, we have seen a complete shake up of the global economic landscape. Growth figures from developing countries are outstripping those of developed markets, and four out of the ten fastest growing economies in the world are African.
With all of the problems hampering our growth, there is significant potential presented by the local market. Macready pointed out that that there is a large emerging mass population that has specific needs that will need to be covered in the future.
This is characterised by a growing middle class who are educated and have significant purchasing power. There is also the traditional discerning high end market which has been the adviser’s traditional go-to-market.
“We are all well aware of the under insurance burden that South Africa faces, and we need to see this as an opportunity for future growth. If we do not cater for this market, the burden on the state will just increase. Future growth depends on being future fit. More than 70% of people surveyed in the market shows that they prefer face-to-face advice rather than going direct. We need to capitalise on this,” said Macready.
Embracing the future
There are a lot of other factors that affect the future. One of the main factors is the changing regulatory landscape.
When faced with an uncertain future, it is natural for advisers to be taking a step back and ask questions such as: will customers see value in advice and will they want to pay for advice? Advisers may be concerned with the way remuneration will look in the new landscape. And there is also always the skills shortage in the industry. How do we bring new advisers into the fold?
“We need to be future fit in order to survive in the new landscape. We need to anticipate change in order to stay ahead. People do see relevance in advice and they will pay for it as long as it adds value to them. If you put customers first, you will remain relevant and every decision you make will be the right one,” concluded Macready.
Editor’s Thoughts:
There were many examples on the day from clients who spoke about the need for valued advice. Perhaps the most striking one was of a client who irritatingly took out dread disease cover over a persistent phone call from her broker only to find out two days later she had breast cancer. She was 32 years old. The famous American author Mark Twain once said “the two most important days in your life are the day you are born and the day you find out why.” This is at the root of advice. Please comment below, interact with us on Twitter at @fanews_online or email me your thoughts jonathan@fanews.co.za.
