by Tony Vidler
We are awash with recommendations on how to “improve the advice business” and enhance professional developement. Regulators, politicians, consumer groups, product manufacturers…competing business models that look to bypass advice entirely….all of them are making a lot of noise about how advice delivery can be improved and where professionals involved in the process need to improve.
Much of what they say has merit of course, and real issues have been identified which require change or improvement. Ethics, business practices, technical competency…all require existing methods and practices to be challenged.
Amidst all the talk on how to make advisers better at advising there is a missing ingredient which is critical to the advisers being effective at delivering actual advice to actual consumers: soft skills.
There has been a serious underinvestment in soft skills development in this part of the world in financial advice for a decade. We are seeing a new generation of advisers trying to develop advisory businesses with insufficient engagement skills. They do not understand sales skills or sales process adequately. They often lack understanding of different peronalities and essential psychology. There has been a massive shift in training and professional development emphasis to technical training, and ensuring professional behavioural standards are created, which is excellent. Most advisers are now technically very competent indeed and have sound ethics and practices – but still struggle to get prospective clients to engage fully, if in fact they can find enough genuine prospects at all.
There should be three broad areas of continual development for a great professional adviser:
1. Technical competency
2. Ethical behavior & standards
3. Delivery skills
The evolving profession of financial advice has focused largely on the first two as these are the areas where professional standards can be raised relatively swiftly, and competence and confidence in the sector improved. The danger is however that the advisers go broke while being ethically sound characters with superb technical knowledge.
For advisers to be truly effective professionally, they also need a significant array of commercial and relationship management skills. It is in this area that the greatest ROI can be found incidentally for the advice business. Developing greater sales skills, founded upon ethical standards and technical competency, will be the swiftest way for advice businesses to grow and deliver greater value to clients.
But it is essentially about achieving a balance of professional developement in all 3 areas. A disproportionate focus on a single area generally leads to poor performance or poor behaviour. Some poor advisers are poor simply because they are focussed almost entirely upon soft skills – essentially neglecting to develope professional competence. Equally, there are many advisers who are technically excellent but don’t have a cljue how to connect with people or lead them through a process of change.
Today’s consumers have become more sophisticated and are leading far more complicated lives, and how they communicate and engage is very differenty to a decade (or more) ago. Technical information is far more readily available for any consumer with a smartphone and professional behaviour and processes are a minimum expectation, so skills becomes a defining point of difference between those practitioners who achieve higher than average engagement levels and those who struggle along no matter how many CPD hours they rack up.
Smart advice businesses will be ensuring that the balance is right in their professional development program, and ensuring that there is a genuine focus on improving delivery skills too. If I am to be entirely commercial about it, that is where the best ROI lies in your professional development spending, so it deserves higher attention for that reason alone.