At the bottom of Gary Mitchell’s e-mails there’s a quote from Samuel Johnson, the English writer and author of A Dictionary of the English Language . It says: “Integrity without knowledge is weak and useless, and knowledge without integrity is dangerous and dreadful.” Mitchell, a senior financial planner with Citi Smith Barney in Sydney, says he loves a good quote – a hangover, in part, from when he regularly produced client newsletters. “I’ve been here since June last year, and prior to that I was with St George Financial Planning,”
Mitchell says. “[At St George] I got asked to move to Bullshit Palace – which is what I call head office in any organisation. And as part of that I had to write a quarterly newsletter for clients. My boss used to do it, and he could rattle this stuff off, but I needed more work. So I started to keep these quotes. “They’re just a means to lighten up the whole attitude, just so [clients] could read it and have a giggle. “In terms of that [particular] quote, my objective with clients is to help them grow and protect their wealth. I teach financial planning for Finsia – well, they’ve sold off their education business to Kaplan – it’s about giving something back to the industry. It’s about trying to have your influence on new planners coming into the game, so that they have an ethical outlook and an ethical approach to looking after new clients.
“I’ve been involved in training financial planners since my Commonwealth Bank days, and that’s 10 years ago now, or longer. One thing I tell my planners is…just think about if this was your mum or dad or someone you care about – how would you like them to be dealt with? “They can go out mostly with the right sorts of answers, but it comes down to making the [client] relax. It’s thinking about the client before you are thinking about yourself. Why would we do it any other way?” Mitchell believes that putting the client at ease is the first step in producing an effective financial plan. If the relationship with a client is relaxed and respectful, then information will not only flow freely from one party to the other, but it’s more likely to stick. Citi Smith Barney has, like all firms, a formal fact-finding process, but Mitchell avoids leaping into it right away.
“We have a fact-find, and we have a risk profile, but in the first interview we won’t touch them,” he says. Mitchell says his preferred technique is to treat the initial meeting with a client as a conversation, and to keep it reasonably informal. He jots down quotes that the client comes up with, and which he can use later on in the process to help illustrate a point or to explain, using the client’s own terms, why he’s recommended a particular course of action. “I don’t like the word ‘process’ – my interviews aren’t structured,” he says. “For me, in terms of trying to make a person comfortable, that’s the job. I know what things I have to uncover. I take lots of notes, because at the end of the day it’s the things that the clients say that will be important.”
Even though every client is different, Mitchell says there are common issues that crop up. “I have been planning since 1989, and you know the things that are going to come up on a client’s life journey,” Mitchell says. “You know the sorts of things: they’re going to hook up with a partner; they’re going to have a family; they’re going to want to buy a place. “You know these things that people are going to go through. It always sounds arrogant when you say ‘I know the things that are going to come up’. I do not know exactly what is going to happen, but I do know the things they’re going to be faced with. “My job is to underpin the things that you want to do with your life, to underpin those [things] with sound financial outcomes. “It comes down to thinking what the client is about – that discovery phase never really ends.”
Mitchell says it’s also important for a planner to keep his own prejudices out of the process. “My perspective does not matter in the end,” he says. “We’re trying to get to the client’s needs and objectives. My perspective just adds some colour to the questions I need to ask. “Part of my job is just to say, ‘Where are you now, and where do you need to be?’ “[Then] you have a lash. You say let’s see what is possible, let’s look at your attitude to risk and reward, and let’s see how close we get.” Mitchell says the aim of the exercise is to provide hard-headed financial solutions to the problems and issues that clients present with, but to build a relationship so clients think to themselves “yep, this is a guy who can help us, and this is a guy we can trust”.
That trust extends to being on call for when clients have questions they want answers to right away. “I expect them to call me,” he says. “I tell them we will have a regular review, but if anything comes up…they should be talking to me. “Just give me a call – we can work out if we need to sit down and talk it through.” Mitchell says he’s always found that if he builds a good rapport with clients, then all the other important commercial metrics fall into line. He’s never focused on sales targets, even though he’s achieved strong results in the places he’s worked over the years. Sales have always been an outcome of building a relationship and identifying the client’s goals and objectives, rather than being an aim in themselves.
But he’s also found himself viewed as a square peg in a round hole – never more so than when he discovered that, despite protestations to the contrary, a former employer put sales above all else. “They said, yes, you should review your clients – blah, blah, blah. But there was never time,” Mitchell says. “I left, I did not have a job to go to, and it took me six months to find St George. That was a big turning point for me, because we had not just in-house products, we had lots of products. We had a master trust – and as good or bad as using a master trust is, it allowed us to say we can give you consolidated reporting, but as well as that we don’t have to use just Advance products. “That was the best job I ever had, and I worked for the best bloke – Paul Cullen.
He’s now moved to Commonwealth Bank [where] he looks after the dealer groups for the bank.” But for someone who thrives on face-to-face client meetings, a move upstairs at St George didn’t sit entirely comfortably. In June last year Mitchell made the move to Citi Smith Barney. Now he’s back to doing what he does best – and loving it. “I think that as a planner I have had enough different experiences or have had enough different jobs to give me a skill set that is not very common,” he says. “I’ve worked as a planner – OK, lots of guys do that. I’m doing my Masters in Financial Planning – not many guys do that. I teach financial planning – not many guys do that. And I’ve even worked in a dealer group, at the Bullshit Palace end of things… in a compliance role – my job was to help [planners] get better at what they do, and…to go out and do seminars.”
Mitchell says not everyone is cut out to do the public speaking thing – but as far as he’s concerned, it’s part and parcel of building relationships. After all, “if you look like a goose, that’s OK – just honk and move on”, he says. Mitchell says that one of the main skills a financial planner must have is communicating to clients what to expect as their financial lives unfold. The Financial Services Reform Act and the growth of statements of advice (SoAs) have not helped. “That whole FSR thing – don’t get me started there,” Mitchell says. “It’s troublesome. I was working in a dealer group when it came out, and it was just a nightmare.
The lawyers thought it was their day in the sun. Everyone was risk-averse; SoAs blew out. There’s this whole discussion about how clients do not read SoAs, people are risk-averse and just trying to cover their backsides. But it all works against getting clients to understand.” Mitchell says he has no issue with fees and charges being clearly explained and disclosed. “I am ashamed to be part of an industry where people still try to hide that stuff,” he says. Mitchell says sound financial planning must encompass product recommendations, as much as it incorporates strategic advice. Separating advice from product might satisfy the purists, but it may not have the desired results for clients – strategic advice without the right product to implement it may not be as effective as it could be; product selling without the strategic advice underpinning the sale is perhaps even worse.
“You have people doing product sales that are not held to the same level of accountability,” he says. “I just feel we will have some level or degree of misselling creep back into the industry. “If we physically separate them – I know the big banks are going to hate this…because they have junior-level people who cut their teeth on product sales – you are going to get misselling. “If you have a strong mentoring relationship in a dealer group, or wherever you have these advisers, then separating the two may give us that sort of problem in the future.”