The Chinese are said to have three sayings – curses, in fact – that go, loosely translated (that is, if they exist in the original language at all): “May you live in interesting times”, “May you come to the attention of those in authority”, and “May you find what you’re looking for”. The first of these sayings sprang to mind recently, during Graham Rich’s Portfolio Construction Conference, held in Sydney in late August.
There’s little doubt that “interesting times” is an apt description of the period we’re living through right now. Just as an aside, Graham is to be heartily congratulated on the conference. Over a number of years I’ve been to quite a few of these sorts of things, and a fact that is impossible to escape is that it makes all the difference in the world when you first determine an agenda to suit your audience, and then find the best speakers to fill the available slots, rather than finding out first who’s prepared to pay to speak and then building the conference program around that list.
But back to the point. The conference was privileged to hear the views and opinions of some leading thinkers, both from the world of investment and more broadly. The message that came out of the conference was clear: investors and financial planners have got to find a better, smarter way of doing things. Woody Brock, founder and president of Strategic Economic Decisions (SED) – a US based research and analysis firm – put it succinctly when he said that we’ve got to find better theories for dealing with the world around us. Now, more than ever, investors need good advice.
They need a guide – someone who can steer them through interesting times and out the other side with their capital at the very least intact and, just as importantly, with a strategy in place to capitalise on new and emerging opportunities. “We believe the principal advantage an investor can have over ‘the market’ is to better interpret [Brock’s emphasis] the generally available news, in particular, the torrent of factoids available from the financial news and the internet,” Brock says. “But the only legitimate way to better interpret the news is to have a better theory [Brock’s emphasis again] with which to understand the problem at hand than others possess.”
Now, I may be mistaken (I recall that happening once before), but it sounds very much like a rallying cry to Australia’s professional financial planners. It sounds to me like Brock is saying what matters most in these interesting times is not access to information – we’ve all got that; far too much of it, in fact – but what we do with that information that matters. And what a planner does with that information will reflect the integrity, experience, expertise and professionalism of the individual concerned. But it sounds like what Brock is also saying is that investors need advice, not just product recommendations.
So if that’s what investors need, that had better be what planners offer. And if that’s the service you offer, you’d better have an efficient and appropriate structure in place to make a good living from the provision of that advice – regardless of whether there’s a product recommendation or sale involved. This is precisely what lay behind the thinking for Professional Planner’s cover story this month – so it was heartening, to say the least, to hear an individual of Brock’s intellectual calibre set forth his thinking recently.
Senior journalist Kristen Paech looks at some of the main hurdles on the track in front of planners who want to shift their practices from a footing of being paid for product recommendations or transactions to being paid for their integrity, experience, expertise and ability to provide intelligent strategic advice. Paech reveals, among other things, that much of the resistance to moving to a remuneration structure built on advice, not product, is rooted in fear; and that most hurdles can be cleared with some application and the correct level of desire. Her article starts on Page 12.
The launch of the Professional Planner website has prompted considerable feedback from readers, most of it positive and much of it constructive. The number of registered users is growing strongly, and a significant number have already signed up to make use of Strategic Consulting and Training’s Dashboard Scenario Planner, a practice management tool that is available to registered website users free of charge until December this year. We have further developments and features in the pipeline, designed to complement and extend the content of the magazine itself.
