I was sitting in my dentist’s chair the other day, after my umpteenth visit, yet another root canal over, when he suggested I had some other problems that he needed to discuss with me. Once I had mentally checked my bank balance and contemplated another series of hours staring at his ceiling I agreed to a chat. Having explained the problem, given me a range of solutions, the likely outcomes of each, and what it might cost, I asked him the obvious question “Well, what would you do?” Now I like my dentist and he doesn’t hurt me, and his ceiling is quite interesting in its own way, but I really needed more than “I can’t decide that for you, they’re your teeth!” This got me thinking about the nature of advice and what our clients and customers expect of us.
In our business, our tagline is “Strategy, Advice, Freedom”. Without going in to why this is so important to us (for a short video explanation click here), the “Advice” part sits squarely in what this experience brought to mind. For us, our clients come to us for Advice, not Options, for an Opinion on what they should do, not an Explanation of what the outcomes of the various options would likely be, for a Recommendation, not simply Information about the law. This for me is Real Advice.
The financial advice business is quite different to many other areas of endeavour in lots of ways, but it is in the Real Advice area where the distinctions fall sharply in to focus. The regulator, many in government, and lots of the general public don’t appear to understand what Real Advice is. Other professions sometimes shy away from providing Real Advice e.g. a lawyer will “advise” whether a course of action is in breach of the law, or an accountant might “explain” the tax consequences of a particular course of action, or a doctor might provide a range of treatment “options” which might work. Until the client is provided with a recommended course of action, then in my view, he has been provided only with information not Real Advice.
So here is the rub. In the financial advice business, we are required to obtain information about our client’s circumstances, consider the client’s needs and objectives, and provide in writing a recommendation as to what the client should do in order to maximise the likelihood of achieving those objectives. We are required to provide Real Advice.
We need to remember just what a recommendation is. After using his/her skill knowledge and expertise to explore the various options available to a client, the adviser will come to a conclusion as to which course of action in his/her OPINION the client should follow. This does not mean it is the ONLY course of action available, nor does it mean that it is necessarily the BEST course of action (an adviser can’t advise on Life, the Universe and Everything), but it is in the OPINION of the adviser what the client SHOULD do. The fact that the adviser is required (rightly) to render that opinion in writing only serves to provide the client, the regulator, the media and anyone else with evidence as to what the recommendation was.
So now the client has a choice. He/She has asked for and received the opinion of a financial adviser, and he/she can choose to accept that advice or not. In the end the DECISION as to the course of action taken always lies with the client. The adviser has provided an opinion, not a Holy edict, nor a guaranteed outcome, and this is an important point. Only the most unprofessional of advisers would guarantee an outcome based on their recommendation, but maximising the likelihood of meeting the client’s goals is certainly the business we are in.
In a former life, as a junior accountant, the partner in charge would often tell me to “vague it up” when dealing with clients. “If you don’t advise them, they can’t sue you”. For me this is an abrogation of professional responsibility, and as someone what takes pride in the provision of Real Advice, not something that I want to be involved in. For me there is a spectrum of “stuff” that clients and potential clients want from us, with Real Advice at one end of that spectrum, and it is this end of the spectrum that I want to work in.
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