Simplicity REQUIRES Sophistication
Best Practice Advice & Compliance & Financial Advice & Financial Planning & Practice Management

Simplicity REQUIRES Sophistication

January 10, 2018

by Tony Vidler  CFP logo   CLU logo  ChFC logo

One of the most popular articles I have written was a short piece on the necessity for reducing Statements of Advice in size.

 

It seems the message to reduce the complexity – to stop producing documents for a courtroom rather than a client – hit a collective nerve.

 

In an increasingly risky and litigious world there is a tendency for financial institutions and those providing support services to financial services to head towards complexity.  Not surprisingly, those providing advice to advisers generally want to protect themselves first….so overly legalistic documentation gets delivered to advisers as a framework for them to use with clients.

 

The advisers then often feel the need to ensure they are protecting themselves…and another layer of complexity is added to the mix.

 

Throw in the opinions of professional associations, commercial industry bodies, consultants, services providers to financial advisers….and that client documentation is no longer just “your advice”.  It becomes the collective wisdom, disclaimers and suggestions of a whole bunch of people…most of whom know nothing about the client you are dealing with.

 

The end result is “complexity” from a clients perspective, and it is more often than not compounded by the somewhat disjointed collection of information which is presented to them over the course of the advice process.

Financial advisers – and those who say they care about the success of financial advisers businesses – need to step back and re-assess what has become a ridiculous situation: the propensity to overwhelm consumers with meaningless and increasingly impersonal information masquerading as “advice”.

 

We should begin an engagement with the end in mind….

…and the end point of the process is delivering useful advice to a consumer which they can, and will, act upon to improve their situation.   What they tend to want is pragmatic and easy to understand guidance on what needs to be done to change their future.

…not this:

 

The objective of any written advice should be to provide clarity- not confusion.

Expert advice should provide solutions – not frustrations.

Advice process documents should demonstrate that the adviser is a technically competent master of their field – by providing simple and effective recommendations.

 

The end result will ideally be that it instils belief and confidence in the consumer.  There must be a practical outcome that the consumer can understand and implement.

 

To achieve this requires that we constantly look to introduce simplicity in at every step of the advice process.  Creating simplicity is actually harder to do than creating complexity….so we ned to lift our game. Simplicity requires sophistication and mastery on the part of the professional

 

Producing written advice which is comprehensible and which also facilitates a desire to begin a process of changing direction is the objective.  That is something which a coach might provide…not something a Judge would write.

For financial advisers there has never been a better time to go back and re-visit the concept of K.I.S.S. – because that is what the people paying fees actually want mostly.  If there is one business truism you can bet on, it is that more consumers will want to do their business with people who make life easier for them, and who are giving them what they want.

 

You might also be interested in this related article:
Written Advice: Should it be Clear? Concise? or Effective?
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Comments (5)

  • Thank you Tony for expressing so eloquently exactly what I have been saying to fellow advisers and software SoA template providers for years. Maybe one day others will get it too. And then I can find other smart people to help me develop templates that are of consumer use and not BS legal protection use.
    As you well say, it’s for the consumer / clients and they want something easy to read and understand, not a War & Peace novel.

    Adam Passwell
    • Thanks Adam – I really appreciate the feedback. We are not alone you know…regulators largely hold similar views as the purpose of this clear advice is to ASSIST a consumer.

      tonyvidler
  • An excellent, well considered and important article. Perhaps Bill Shorten will read it?

    Thanks Tony

    Jamie Forster
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