Balancing Adviser Needs and Clients Wants
Compliance & Financial Advice & Practice Management & Strategic Issues & Strategy

Balancing Adviser Needs and Clients Wants

March 21, 2022

by Tony Vidler  CFP logo   CLU logo  ChFC logo

trusted-advisorThe professional Financial Advisers’ needs matter as much as the Clients’ wants.  Consumer groups & regulators will probably disagree of course, but the ideal practice is one which surely achieves this balance isn’t it?  After all, practitioners are trying to earn a living and meet the wants and needs of their own families whilst trying to appease regulators & industry stakeholders, as well as deliver what their clients want.


Balance must be found.


Everyone who matters agrees that it is entirely inappropriate if the balance is so far out that the clients wants become irrelevant.  That is; any business which is all about extorting clients for maximum profit and minimal service essentially disregards what is good or right, and that is not a good business.  It is certainly not acting professionally or ethically.


The other end of the philosophical spectrum does however get excessive airtime and certainly has some support from some industry stakeholders – just not the ones actually footing the bills.  That view fundamentally is; the clients wants are paramount and the practitioners needs are irrelevant.  In this paradigm practitioners become social workers and profit is sinful.  There is actually a slightly evangelical feel to this school of thought….it is nonsensical and unbalanced.


Either extreme is unhealthy and will not constitute an “ideal practice” for most practitioners.

The essential premise driving the line of thinking which says “advisers running profitable busineses is bad” is the necessity for professional advisers to become the Trusted Adviser.  Naturally (goes the thinking) all advisers must be a professional.  With that word “professional” being defined philosophically by the evangelists as that role where it is realistically only the clients interests which matter, the school of thought has it now that the goal for every adviser must be to achieve Trusted Adviser in order to be defined as a professional.  Then there is some sort of disconnect between profit and trust – apparently the two are incompatible to evangelists.

Profit and trust are definitely not incompatible, and neither is incompatible with professionalism or being a professional running a professional practice.


I would be the first to agree that “Trusted Adviser” requires absolute professionalism in all aspects.  I would also agree that for many practitioners becoming the Trusted Adviser to their clients is the ideal, and presents the opportunity for a viable business model.  In fact the work on “The Trusted Adviser” by Maister, Green & Galford is essential reading for any aspiring professional in my view, and one of the top dozen or so books that I could point to as “career-changing” from my own perspective in that it re-shaped much of my own thinking many years ago.  In that work they laid out a pathway for becoming the Trusted Adviser which was absolutely spot on.


Here’s the thing though:  you can be professional without being A professional.  Professionalism is about behaviour and values and ethics.  Being A professional is about those things together with technical competency and proficiency.  So I would contend that one can run a professional service business without necessarily meeting an industry’s definition of being  “A professional”.  Being trusted is an essential part of being A professional of course, but so too is it an essential part of a professional practice’ ability to serve and keep clients.


Being A professional may not actually be the goal for many advisers today – or maybe it is, but it shouldn’t be.  Running a professional business may be the goal, but that is not the same thing as being the Professional Trusted Adviser personally.  I wonder if many advisers have been so caught up in the debate over personal professionalism that they are forgetting that perhaps their original goal was simply to run a professional practice?


What is wrong with being a Trusted Brand?

There are plenty of great businesses which do wonderful things for many consumers in financial services, but which do not give advice at all.  There are plenty which deliver superb value in areas that consumers value, but which restrict their offering to a particular knowledge set or product suite.  And they do so quite professionally, even without necessarily being staffed by what the industry might term “professionals”.


They are Trusted Brands.  But they are not Trusted Advisers perhaps.  And that is ok as a business model.


For practitioners today who are contemplating the many changes (known and unknown) which are required to make the transition to The Trusted Adviser Who Is A Professional as defined by the rule-makers and opinion-makers there is often a strong sense of imbalance about both the process and the end result.  The process of transition becomes one which is a price they simply do not want to pay….discomfort, inconvenience, cost, foregoing a great lifestyle….all valid reasons for practitioners perhaps feeling uneasy about heading down that path.  The end result is equally unpalatable from a business perspective for many.  Philosophically it may be fine – they can agree with the view that Trusted Adviser firms have a fiduciary duty and avoid any possibility of conflicted advice (if that is even possible).  But they just don’t want to do the things on a daily basis which practitioners like that have to do.  It begins to look like a business they would hate to work in, let alone own and try and build.


Maister et al provided a great pointer for those practitioners who feel uneasy about the prospect of their businesses and their lives getting out of balance.  There are other viable financial services advice or service models which may perhaps better balance the practitioners and the clients needs.


There is nothing wrong with aiming to be a Trusted Brand.  Being an adviser who operates under the umbrella of a great institutional brand and only deals with the institutions products doesn’t make one any less professional.  Professionalism is about behaviour and ethics after all.  Frankly we only have to look around the market to see that many many consumers place enormous faith in institutional Trusted Brands and are quite happy to continue using them.  That is a viable model which may well balance up the practitioners needs with client wants.  Precisely the same opportunity exists for  practices which are not institutionally-aligned, but who focus on particular experiences or services.


Creating your own Trusted Brand which perhaps retails products or solutions, or maybe both, is a viable option.  You can be a trusted person operating a Trusted Brand without necessarily going all the way along the career development path to Trusted (Professional) Adviser operating under a fiduciary standard.


The goal should be to find the right balance between your commercial needs as a practitioner and the positioning you wish to achieve professionally with what clients want and will pay for.


Don’t be afraid in these times of change to unsubscribe from the prevailing school of thought about how a practice or a practitioner must develop.  Instead, think about balancing your needs with the clients wants, and the type of business you should be trying to build will become much clearer.


You might also be interested in this related article:

Where Will The Greatest Disruption To Your Practice Come From?
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