Peter Switzer says planners need to learn to listen more.
It has always perplexed me why only one in five Australians are interested in doing business with financial planners. Of course, there are lots of reasons, but I reckon the biggest is that our industry, made up mostly of men, are not great listeners.
The other reasons include the way we have charged for our services; the poor past reputation – not helped by recent “storms” of scandalous stories; the scabbiness of many Aussies; and the stupidity of legislation that has made it too expensive for less well-off consumers to access financial planners.
But I think the catch-all reason is that we have not been great listeners.
John Maxwell, in his book The 21 Irrefutable Laws of Leadership, insists that great leaders are also great listeners. Financial planners are ultimately leaders of their clients, and so listening is a skill that is critical.
I came across a 30-something financial planner who recently told me that he had “little to learn” at this stage of his career! That was a truly worrying self-observation.
The great business thinkers, like Jim Collins of Good to Great fame, argue that the best in business “confront the brutal truth”. That is what our industry has to do to go to the next level and push up the percentage of Australians who will work with us.
In my recent trip to New York for my Sky News Business Channel program, I interviewed a lady who hailed from Rose Bay in Sydney – Josephine Linden. When she retired recently she was the head of private wealth for none other than Goldman Sachs.
Her clients, some of the wealthiest people on the planet, included the likes of the Prince of Wales foundation. That’s not the local Sydney hospital but the real Prince of Wales!
I asked Josephine how she was able to make her way up the ladder in a firm such as Goldman? She said she was always a better listener than many of her male rivals and that was her competitive or inside advantage.
I don’t doubt that most financial planners are genuine and want to help their clients; but as a group we have not listened to a large chunk of potential clients, many of whom are self-managed super fund members.
Some of these people are driven by cost-saving goals, while others simply like the thrill and achievement of doing it themselves. However, these people still could do with some help. In fact, we know they could do with our assistance, knowledge and even out alerts when key developments emerge from Government or the markets.
I came across a CEO of a publicly listed company, who said he loved running his own SMSF, but found it difficult to find an adviser to give him some advice on his DIY fund.
“They all wanted me to sign up for ongoing advice,” he complained.
“I just wanted information for my set-up and did not want to be forking out every year.”
A long time ago an insightful US business speaker, Jay Abraham, explained to me the concept of the lifetime value of a customer. He told the story of a business owner he advised who paid 10 per cent commission to his sales force for new customers.
Jay then asked, what is the most important sale? The business owner said, the ones that follow the first, because there were no commissions on ensuing sales.
But Jay pointed out that without the first, the others never arrive. He recommended that the owner pay 100 per cent commission on the first sale and the guy’s business grew by 300 per cent.
Our industry has been besotted by the lifetime value of a customer and so we have strived to get all customers onto ongoing service; but we have been missing out on those customers who might want to see us every few years, or when they have an important money issue to deal with.
We need to change our thinking and start listening.
Peter Switzer is founder of fee-for-service financial planning firm Switzer Financial Services and hosts SWITZER on Sky News Business Channel, Monday to Thursday at 7pm & 10pm. Visit www.switzer.com.au or email: peter@swtizer.com.au
