Friday, 14 September 2012

Blog Has moved!!

Thanks for visiting the Blog...BUT WE HAVE MOVED!

To give readers a better viewing experience and an easier platform to find stories of interest the blog has been moved to

All the existing posts have been transferred, and it is a lot easier to search for them than ever before.  It is also easier to share them with others, or to follow new blog posts as they are put up.

The blog has a new name, which is reflected in the domain name (as above)

Thursday, 16 August 2012

5 steps to playing it safe

By Tony Vidler
How does an adviser play it safe when it comes to proving that they have acted in the best interests of the client?

There are 5 key things that the adviser must do - and be able to evidence afterwards - to show that they have worked for the benefit of the client, and not acted out of self-interest.

It comes down to being able to show that you "know your client".

Knowing your client (as a principle of regulatory testing) is about understanding the clients situation and needs in order to provide suitable advice that is most likely to help them achieve their objectives.

The 5 things an adviser must do in order to play it safe, and be able to show they have been working in the clients interests, consist of 3 process steps and 2 ethical considerations.  They are:

1.  Identify the objectives and needs of the client, together with showing they know the clients financial situation

2.  There must be clear instructions regarding what advice is being sought, or offered.

3.  The relevant client circumstances need to be understood and documented.

Gathering the right information and having clear understanding with the client, as outlined in these three steps, will go a long way towards satisfying future critics.  However, to ensure that you are REALLY working in the client's best interest, two further tests can be applied.

4.  Did the adviser to attempt to find out more information regarding the client's circumstances if it could be considered "reasonably apparent" that the information provided by the client was inaccurate or incomplete?

5.  Does  the adviser have the competency and expertise to provide the advice required?  This is effectively a self-assessment on the advisers' part - but hey, we know whether we know enough to do the job properly really don't we?   

In reality, the ethical tests are never applied - unless the regulator comes knocking for an audit, or a customer expresses dissatisfaction.  Both of those circumstances can happen at any time, so you do have to apply these tests.  If you find yourself as an adviser thinking "I don't think I have the knowledge to do that really well"....then you really should decline to try and provide the advice.  Otherwise you are inviting future dissatisfaction and problems.

One of the key things that is often misunderstood by financial advisers is that you will rarely be playing in terribly unsafe territory because of product non-performance (e.g. problem insurance claims, investment market losses) - IF your process is sound.  The adviser will be judged primarily on the basis of the processes they can prove to have used, and the extent to which they have demonstrated the principle of "the clients interest first".

To play it safe as an adviser therefore there are 2 big things to do:

* have a process showing you understand your client, their circumstances, and objectives
* conduct yourself honestly - especially in assessing your own competency

further reading:

Best Practice: ASIC doesn't expect perfection

Like this?  Then share it with others...or visit for loads more useful and interesting information

Tuesday, 14 August 2012

Should we care about the public interest?

by Tony Vidler

Should financial advisers care about the public at large?  The people who are NOT our clients?  Those who don't pay us anything?


When one considers "professionalism", and the attributes that define a professional, you quickly come to the conclusion that a unique characteristic of the genuine professional is a commitment to the public interest.

If you are a financial adviser who is committed to being a professional, you have a social responsibility that extends beyond just those clients who can afford your services.  In plain terms, you have a responsibility to make available your professional expertise to members of the public who have genuine need of your knowledge, but who cannot necessarily afford to access it, in order to improve the standing of the profession itself whilst rendering service to society.

It is a principle of of the hallmarks that define a professional.  It is referred to as pro bono, or more correctly:

"Pro bono publico (English: for the public good; usually shortened to pro bono) is a Latin phrase generally used to describe professional work undertaken voluntarily and without payment or at a reduced fee as a public service

It is common in the legal profession and is increasingly seen in marketing, technology, and strategy consulting firms. Pro bono service, unlike traditional volunteerism, uses the specific skills of professionals to provide services to those who are unable to afford them."

(source: )

One would like to think that all good citizens care about the public interest, and will do something to benefit wider society generally with the donation of their own time and expertise.  A huge part of our society does exactly that - contributing their time and effort to coach sports teams, raise funds for disadvantaged members of the community, work together to build facilities for the common good and so on. 

Undoubtedly our society would be a far more difficult environment, and less pleasant to live in, if it wasn't for the good citizens who donate their time and effort to making their part of society a better place by looking beyond their own immediate needs and pleasures.

Many financial advisers have contributed to their society in the same way over many years - they too coach the kids, fund raise, provide foster homes, mentor troubled youth and everything else that solid members of society do.

We have the ability to provide practical help however that not all other caring members of society can do however.  By sharing our knowledge and skills with those who might never be able to access good financial advice, we can create inter-generational change.

Helping a family with poor financial literacy to learn how to create assets and self-sufficiency, or escape crippling high cost debt, or understand how to create a dignified retirement for themselves....these are things which not only change the lives of those you help, but also the lives of those who they in turn influence and are responsible for.

Sharing our skill and knowledge in this manner is very rarely done by the financial advisory industry - and for many good reasons.  It does cost the adviser personally to provide such service - even if that is only in an "opportunity" cost.  There is the potential for public cynicism and cheap accusations of the adviser engaging in such programmes as a "marketing exercise".  The adviser potentially incurs the regulatory risk despite the absolute not-for-profit nature of the work being provided.

However, the potential benefits to financial advisers collectively of creating - or enhancing - public confidence through providing pro bono assistance to those in need are worth these risks. 

The elevation of the professional standing of those who commit to the public good over and above their own commercial objectives is satisfying and personally fulfilling at the very least.  The difference you can make in people's lives though - and ultimately in the lives of their dependents - is incalculable.

A word of caution though:  the same duty of care and professional diligence obligations must be taken when providing pro bono advice.

Apart from the very obvious need to minimize the business risk to the adviser, there is a higher level of public scrutiny placed upon the actions of the professional when engaged in providing such service.

Demonstrating your professional expertise and professional conduct while working in the public interest is what actually defines the Professional in the eyes of the public.

Financial advisers should grasp such opportunities to work together on pro-bono projects.  It's what separates the really good advisers from the rest.

Like this?  Then share it with others...or visit for loads more useful and interesting information.

P.S.  Here is a blatant plug for a campaign being run by the Commissioner for Financial Literacy and Retirement Income here in New Zealand, that a number of professionals have agreed to assist with by providing pro-bono advice to members of the public during Money Week 2012.  

(Disclosure of interest: I have volunteered, and I would dearly love to see a thousand advisers participating!)

For Consumers:  If you want to talk to a professional adviser for free during Money Week you can call the IFA on 0800 404 422 or go to

Tuesday, 7 August 2012

Why Dirty Harry wouldn't win a Gold Medal

by Tony Vidler.

One of the great movie lines spoken by the character Dirty Harry was "a man's got to know his limitations".  A line which always seems to apply to financial advisers.

But this doesn't apply to Olympians does it?  

I am captivated by the incredible achievements of humans that is demonstrated at the Olympics, and their ability to continually re-define their (apparent) limitations.  

You cannot help watching them, admiring them, and then wondering how you can apply what they know and do, to the non-Olympic and mere-mortal world we live in.

At the London 2012 games 2 athletes standout for me personally, on the basis of how they continually have re-defined their own expectations (or self-limitations).  

Michael Phelps must be considered one of the greatest athletes of all time, and his record is remarkable.  The second athlete to stand out for me is also a swimmer - who did not win a medal.

Lauren Boyle, from New Zealand. What a remarkable young lady - and the epitome of a "champion".

She came 4th in the 800m freestyle final.  But to get there she had to continue, race by race, to swim faster than she had ever swum in her life.  Breaking her own national records to get to the final, and then under the immense pressure of the final of an Olympic glamor event, she lifted another notch again.   And at the end of the race, was she upset at getting 4th?  Not on your life...she recognized that she had challenged her own beliefs, re-defined her apparent limitations, and found a new confidence and performance level.

So what do Lauren & Michael Phelps have in common?

Well, they both have a coach that they listen to and learn from.  They apply process and systems to enhance their training and "professional development".  They take advice from their mentors.  It is up to them to put that advice into action and performance though.

According to a study of Olympic Champions here are their common denominators for success:

Characteristics of Champions

  An ability to cope with and control anxiety.
  Mental toughness/resiliency
  Sport intelligence
  An ability to focus and block distractions
  A hard-work ethic
  An ability to set and achieve goals
  High levels of dispositional hope
  Adaptive perfectionism

Source:  Psychological characteristics and their development in Olympic champions.
Gould, D., Diffenback, K., & Moffett, A.

If you want a self-improvement checklist of things to work upon, you will not find a much better list than this one.

On this basis, would that excellent pistol shooting Dirty Harry have got a gold medal?  

I don't think the very least because he wasn't too "coachable", or open to learning.  There are a couple of other attributes that he didn't share with the Olympians either, and we can't overlook his tendency to adopt a cynical "me versus the world" attitude combined with a mindset of "my way is the only way, and winning is everything".  Brute force as a method of problem solving also has its limitations too I guess.

What led me down this line of thought in recent days is the realisation that there are more business owners like Dirty Harry than there are business people thinking and behaving like Olympians.

Champions challenge themselves, and are continually focused on incremental improvement, open to new ideas and learning, and reinforce all they learn with sheer hard work.  

Any professional advisers or professional service firms looking to develop or just get business ideas and inspiration should think about adopting the mindset of an Olympian rather than Dirty Harry. 

You don't have to actually get a gold medal or be first in the world to be a champion.  You only have to have seen Lauren immediately after NOT winning a medal to realise that.

Like this?  Then share it with others...or visit for loads more useful and interesting information.

Tuesday, 31 July 2012

Will you marry me?

 by Tony Vidler.

I have no idea what the actual statistics would be, but I am willing to wager that the success rate of popping the question "will you marry me?" onto a prospective partner who you have not yet dated is probably pretty low.  

If you've dated for a bit, the odds get a bit better, though only marginally so.  If you've been engaged for a while and everyone knows what the end game is, then the odds are pretty good that you will get a "yes" to "will you marry me?".

How does this apply to financial advice?  Well...the biggest problem with financial adviser marketing is the tendency to pop the "will you marry me" question to people who haven't decided yet whether they want to spend a Saturday night with you. 

This lies at the heart of dealing with a common adviser question: "How can I make my marketing more effective?"

Before answering this question though it is important to understand a more fundamental question: What is the difference between marketing and selling?

Many advisers seem to think that these are one and the same thing.  Or, if pressed a little further, "marketing" is often confused with "advertising".   Marketing does include advertising... as it also includes having a clear value proposition, understanding the target market, the branding of the individual and the branding of the business entity, and a number of other things.

Thinking bigger picture though; marketing is really about creating opportunities to gain a client or some new business.  Selling is the process of converting that opportunity into an actual piece of business that your accountant can see.

To answer the question posed at the outset then, one has to understand that while there may be many components that go into creating really effective marketing, the underlying question that the adviser is really asking is "how can I create more opportunities to engage with people who would be willing to take the actions I would recommend"?

The part that really matters in this underlying question is "opportunities to engage with people".  THAT is the piece that you must concentrate upon to create "more effective" marketing.  This revelation is the point where advisers often say "aha, I get it" and their marketing efforts lift as they begin to focus upon creating new opportunities to generate future new business.  It makes sense to them that if they are able to attract attention, and engage with people, then they begin to establish a relationship of trust. Surely having done this the prospective client will take my advice and work with me?

It is at this point though that the bulk of such marketing efforts fall down in a heap.

The reason?  Lack of patience and understanding of the engagement process.  It's akin to having a couple of Saturday night dates and then wondering why the dream date doesn't want to marry you yet.  A lot of adviser businesses at this point are creating a lot of Saturday night dates....but there's no follow through.  It's just lifting the initial activity level really.

Engagement (in this business sense) is really about inter-acting with people on a regular basis in a way that they feel comfortable with until they decide they want to be with you.  Your marketing purpose is to get, and then hold, their attention and build their level of interest in what you have to offer in the way of valuable advice and solutions.  At some point in the engagement process you - or more likely some other event unrelated to your marketing and positioning - will trigger "desire" on their part to act.

That is when the marketing process is finished, and selling begins.  Although, if your marketing and engagement process is done well, the reality is that there is very little selling involved. 

The necessary level of trust and credibility in you as the right adviser has already been established.  The rest is process and technical competency being applied to the clients' need.  

The reality for a financial adviser business though is that engagement is forever.  The actual marriage part - your client buying you or your solution at some point - is actually just a moment in time.  It is a purchase. A transaction.  A fait accompli....if the engagement was a fulfilling one.

Engagement with clients, for the successful advice business, is long term.  Once you have them as clients, then the engagement and ongoing interaction becomes even more important, as they can add significant value to your business if you can move them from supporting you to the point where they are advocates for your business.

To make your marketing more effective - to get better results for your business - stop asking the marriage question.  It's not about the big moment and the big "sale".  Build systems and processes to engage people in a way they feel comfortable with, and share information and insights, and help them help themselves.....and they will want to take it further!

Like this?  Then share it with others...or visit for loads more useful and interesting information.