The uncertain road ahead for an advice business
Practice Management & Professional Services & Strategic Issues

The uncertain road ahead for an advice business

February 2, 2018

by Tony Vidler  CFP logo   CLU logo  ChFC logo

road-ahead-for-advice-businessA constant question for  many advisers, particularly when they’ve been sitting about over a break quietly contemplating the road ahead, is what do they have to do to prepare, or adapt?


Obviously there is enormous uncertainty about what lies ahead for advice businesses; some of it predictable and some of it entirely unpredictable.


You can take charge and to a large degree lay your own road ahead if you understand 4 essential concepts that define a true “advice” business.


The future for the financial services professional is being the valued source of advice – which is something beyond being product focused….or being able to charm folks and have strong selling skills….


That may seem a little self-evident and a little simplistic on the surface because surely all financial advisers are perceived to be valued providers of sound advice already aren’t they?  Except we know that just isn’t the case.


Only approximately one-quarter of consumers in this country (according to one study) actually turn to financial advisers as their primary source of financial advice.  Read that again slowly….and then understand the massive opportunity that lies within the 75% of consumers that do NOT yet see a financial adviser as being their most reliable source of financial advice.   Yet, a large proportion of those same consumers have financial products already.  So our opportunity is to position as the valuable source of advice rather than just being a source of product decisions.


There are a few advice areas that we KNOW are valued by consumers, and which present genuine opportunity for professionals looking ahead.  They might even be seen to define “an advice business”.


1.  An advice business would be positioned at the leading edge of industry and consumer trends.  It knows the issues, problems and key trends that will affect its clientele before they do. 

Understanding consequences and implications of economic and political decisions and market trends and then being able to guide people accordingly is something advice businesses would focus upon doing.  Talking about that publicly and showing their thought leadership and expertise would be a key element of that.


2. An advice business would not link its value proposition to product or market performance. 

These are factors which the adviser cannot actually influence in any meaningful way.  The advice business links its value proposition to client outcomes – not portfolio or product outcomes.  It is focussed upon helping clients achieve their goals and objectives.


3.  An advice business would leverage its knowledge. 

Success would no longer be defined simply by chargeable hours, commissions generated or clients gathered into the CRM.  These things contribute to commercial success of course, but true success as an advice business would be reflected by the influence of the business.  That is; how many lives they can reach and change.  That may be achieved through social media, delivery of seminars, workshops, courses or books, or it may be through creating practical apps that consumers can benefit from using.

Naturally these tactics of influence should in themselves contribute to commercial success of the practice, but their importance to a true advice-business is the ability to market the thought leadership and continually reinforce the professional positioning of the practice.


Finally, a potentially contentious thought:

A true advice business only applies and delivers what its clients want.  It does not get consumed with its own processes, technical prowess or sense of ethical  superiority….it is focused on those things the client actually values:  peace of mind; understanding their choices & the consequences; convenience; results….


This means that an advice business does not deliver its services to clients in a bland prescribed format designed by lawyers and bureaucrats.  Of course it will ensure the compliance functions are fulfilled, but it does not necessarily lead with compliance. It provides creative solutions to its clients problems and delivers the advice in the manner the clients want and value, and completes the compliance steps later if need be.


That is advice which is valued by consumers – and focussing upon that is the way ahead for financial advisers.

You might also be interested in this related article:
Sanity Check: A “statement of advice” should be A Statement


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