Peter Switzer says it’s coming – and it should bring out your best
Financial planners are being asked to accept a hell of a lot of change in their working lives and businesses right now. And undoubtedly, many would be wondering if they want to keep in the game.
However, it is at times like these that I take a lot of comfort out of the advice that “if nothing changes, nothing changes”.
Change can have only two directions – progress or regression – and in my mind there is no choice. However, it can be a challenge to go for progress as it invariably insists that we get out of our comfort zone; and right now there is plenty to take us out of our comfort zones.
The Reserve Bank loading up the mortgage belt of Australia with rapid and relentless interest rate rises. And it comes when question marks are again looming large over the global financial system, as the Greek bailout raises doubts over other governments, such as Spain and Portugal, as well as the European banks that have bankrolled these potential defaulters.
Of course, a country can’t disappear like Lehman Brothers and Bear Stearns. People can be taxed and public servants can be fired to fix up the books, but the political process can drag out and undermine financial institutions that have played bankers for debt-troubled countries.
Then we have the Americans trying to reform their financial system, which is an overdue good idea; but as we saw with Goldman Sachs, it has rattled market confidence, if only for a week.
Keeping up the market-frustrating role of governments, our own has decided to undermine our best-performing export sector – miners – to repair its budget and GFC-created indebtedness.
And all of this comes as the Rudd Government, via its Cooper and Ripoll reviews, wants to change the way financial advisers do business and handle super.
It is all putting a fair bit of pressure on we financial planners; and many might be wondering if they want to continue in the industry, or how they should respond as business owners or professionals.
Recently, on my Sky News Business Channel program, I interviewed Andrew Inwood from a company called brandmanagement. He has a database of more than 100,000 Australians in the A-B demographic – our classic target customers.
He made the point that people who had a financial planner over the past two to three years were worse off compared to those who did not have an adviser!
But it’s not all bad news. Over the past eight years, those who have had an adviser were miles better off for the experience than those who had been their own money advisers.
This of course does not surprise us, as we have always lived by the mantra that we invest for the long term, and it is time in the market, not timing the market, that has proven to be the wiser strategy.
Sure it is better if you can time the market, but history shows we are not good at timing our decisions.
The challenges of the market, and even government policies aimed at GFC-related issues, will settle down and the market upward trend will again be our friend – time and compound interest do that sort of thing.
However, the impact of the Rudd Government changes have to be seen as an opportunity and not a threat. As a business owner you have to listen to your customer base. You have to change the product/service, or more correctly and relevantly, you have to sell the great quality service of advice, instead of the product.
These imposed changes will bring out the best in you and your business, provided you confront the brutal truth and have an overwhelming belief in what you can create.
The old world of financial planning culminated in the debacle which was Storm, but the new world where advisers advise and really look after the interests of their clients will create wonderful businesses and a reputation for financial planners that all of us will be proud of.
And if this does not happen, the reform process should continue until it does!
Peter Switzer is founder of fee-for-service financial planning firm Switzer Financial Services and hosts SWITZER on Sky News Business Channel