Redefining the world of a successful financial planner
The winds of change are certainly blowing in the financial planning industry as it comes to terms with an ever changing world. This was the main message presented at the 2015 Financial Planning Institutes (FPI) annual conference which was held in Sandton on 24 and 25 June.
The theme for the conference was Embracing Change, and these sentiments were echoed by FPI Chairperson Sankie Morata who opened the conference. “We find ourselves in an industry which is dominated by risk. And although tough, we have found a way to operate in the industry in a way that encourages service excellence.”
Batten down the hatches
Battening down the hatches is an old English idiom which suggests that people should prepare for some seemingly tough times ahead. While industry has shown remarkable resilience to the worst effects of industry change, Morata says that the waters ahead will not always be easy.
“We should be proud to be a part of a professional community that adheres to a world leading code of professional practice; an industry which can be called into account when needed. Embracing changes, although seemingly daunting, allows financial planners to remain relevant and provide the public with professional coaching that is desperately needed in society,” said Morata.
He added that the Financial Services Board (FSB) is moving in mysterious ways in the manner the industry will be managed in future. This will no doubt be the biggest driver of change in the industry.
The world of behaviours
Over the years, certain naturalists have become world renowned because of the study of the behavioural characteristics of certain animals. It is these studies which allowed the public to better understand the world around them and how they interact with it.
In essence, this is what financial planners are expected to do with clients. They are expected to look deeper into the behavioural science of their clients in an effort to understand them and to improve the service offering they provide to them.
Paul Resnik, Co-founder and Director of FinaMetrica, points out that the cornerstone of understanding behavioural science is through building trust. “You need to ask why you want your client to invest in your product. You need to create a circle of virtue. Virtue is a by-product of trust,” said Resnik.
In order to achieve this, you need to establish five proofs in your business. Firstly, you need to prove that you know your client. This means that you need to get in tune with their needs, situations and aspirations. Secondly, you need to prove that you have identified mismatches in their current portfolio and have identified alternatives to these mismatches.
The third proof is that you need to prove that you know your product and how it will benefit your client. After that, you need to explain the risks of the product to the client and you need to prove to them that they understand the product on a level they are comfortable with taking on the product’s inherent risks. Finally, you need to prove that you have received your client’s properly informed consent to the risk in the financial plan and product.
The flourishing client
If a financial planner can stick to these five proofs, Resnik believes that the financial planner will go a long way in encouraging client satisfaction. He added that if one sticks to the five proofs, clients will flourish, and in turn your business will flourish.
This all begins with integrity. Resnik’s parting advice was that financial planners need to suspend their egos and approach the client from the standpoint of: I will share with you what I know about the product and the industry. But at the end of the day, you need to make the decisions.
Financial Planner of the year announced
One of the biggest events at the Conference is the announcement of the Financial Planner of the Year. This year’s winner was Wouter Fourie CFP, CEO of Ascor Independent Wealth Managers, who also believes that there is a specific formula to being a successful financial planner.
“If you are professional, you need to be a professional at heart. While belonging to the FPI does offer a lot of advantages, it is neither the beginning nor the end of your professionalism because no professional body or designation will make you a professional. You need to have a burning desire and a specific drive to give back to the industry,” said Fourie.
He said that there are three types of people in the world: Those who make things happen, those who watch things happen, and those who wonder what their life would be like if things happen. Fourie has described himself as a person who makes things happen.
Editor’s Thoughts:
Fourie added that winning the Financial Planner of the Year Award allowed him to set goals for himself on the journey to win the award and it forced him to look at his business and make some crucial calls on what was working and what was not working for his business. Perhaps embracing change is more about looking internally than looking for someone to blame in the industry? Please give us your thoughts. Please comment below, interact with us on Twitter at @fanews_online or email me your thoughts jonathan@fanews.co.za.
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