Going back to when I became a self-employed financial adviser in 1991 it was a sales role.
I had my one week of training and then was expected to go out and make money immediately. This is why the attrition rate was so appallingly low.
Oh, how things have changed!
With increased regulation and professional requirements, the role is significantly different. Financial advising has become a consultative role with far more emphasis towards technical knowledge.
The increase in professionalism is a good thing and yet, right now, another shift seems to be happening. The financial advisers of the future will have a different role altogether.
Daniel Pink is a provocative writer and speaker and worth paying attention to.
In his book, ‘A whole new mind’ he writes:
‘The last few decades have belonged to a certain kind of person with a certain kind of mind – computer programmers who could crank code, lawyers who could craft contracts, MBA’s who could crunch numbers. But the keys of the kingdom are changing hands. The future belongs to a very different kind of person with a very different kind of mind – creators and empathizers, pattern recognizers and meaning makers. These people – artists, inventors, designers, storytellers, caregivers, consolers, big picture thinkers – will now reap society’s richest rewards and share its greatest joys.’
What does this mean for financial advisers?
Left-brained, routine tasks will become mostly automated. It has already happened in many services and is happening right now in many others.
For instance, I used to buy my car insurance from the same guy, at the same brokerage, year after year. Who buys insurance like this anymore? Insurances are sold almost entirely on-line and through call centres.
Because these are relatively inexpensive distribution systems for products and services. Human beings are expensive by comparison.
Providers of financial products and investments are not sentimental about using advisers. They want the most effective, efficient, and low-cost way of getting to market.
The advisers of the future are those who excel at the human element
As Daniel Pink suggests, the future belongs to big picture thinkers, meaning makers, and empathisers. The financial advisers of the future will be helping clients manage life transitions, gain clarity and coach them to have a better quality of life not only in future but right now.
Meir Statman, Professor of Finance at Santa Clara University and author of ‘Finance for Normal People: How Investors and Markets Behave’ wrote:
“The “Main job” of an advisor is to manage a client’s well-being. You want to maximize clients’ wealth, of course; but eventually wealth is just a way station to well-being. As an advisor, you have to be concerned about people’s well-being and listen very carefully to them.”
Of course, as is always the case, some advisers will refuse to acknowledge what is happening and prefer to stick their head in the sand. Yet is this not one of the reasons there are only ten percent of the number of advisers that there used to be?
General Eric Shinseki, one time Chief of Staff of the US Army, famously said, ‘If you dislike change, you’re going to dislike irrelevance even more.’
The financial advisers of the future will thrive because they are masters of reinvention. Instead of denying, resisting and being afraid of change they welcome it. They realise that staying ahead of the curve is way more interesting and exciting than trying to cling on to the past.
Right at the heart of this is knowing how your mind works.
Clinging to the past is driven by fear. But fear is not the result of our circumstances, it is simply the way we are thinking about things.
And you always have the freedom to think about things in a new and different way. The inherent design of the mind is that it will give you new, fresh, and useful thinking.
So, how do you look at your future?
P.S. Steve Chandler’s biggest selling book is called, ‘Reinventing yourself’. Steve also talks about it in his audio of the same name. I have his permission to share this with you and you can access the download by clicking here.