Financial planning is a tremendous business to be in because it enables its participants to control their own destinies, according to leading US financial planning trainer and consultant Bill Bachrach.

Bachrach, chief executive officer of Bachrach Associates, says while he acknowledges that external conditions can frequently be poor, “I am a strong believer that financial advisers and financial planners are in such a great business because they have control over their personal economy”.

“Typically, if you examine a financial planner’s business, you find that they could be generating a lot more revenue if they would just shift their activities,” he says.

“Regardless of the economic conditions, the financial conditions… I would argue, or put the point forward, that regardless of the negative environment out there, people need advice. People need financial advice when the economy is good. People need financial advice when the markets or the economy is flat. And people certainly need advice when things are bad.

I’m just a big believer that whatever your financial conditions are as a financial planner, you’re probably in that position more because of our own actions than you are because of the GFC, or the regulators or because when America sneezes the rest of the world catches a cold, or what’s going on un the eurozone, or [that] Spain has 35 per cent unemployment.

“This is a business where you’re in control of what your results are. So if it’s good, my guess is that’s because you’re doing good work, giving good advice and have business work habits.

“If it’s bad, you could still be a good planner giving good advice, but maybe you’re just not out there doing the kind of work to get clients.”

Effective planners, Bachrach says, must remain focused on delivering great service to satisfy client needs, focused and avoid being distracted by irrelevant issues – largely as a result of paying too much attention to the “noise” promulgated by the media – and not enough time focusing on the things that really matter.

Help but not charity

“A magazine like yours actually provides content that will help a financial planner grow a better business and do a better job for their clients,” he says.

“But most of the media, in general, the general news media, is very distracting. This is not unique to Australia, by the way. It’s the same in the US and in Canada and the UK and New Zealand and Canada. Everywhere I do business, I find that there are a lot of distractions and there’s a lot of noise. So people get consumed with these things that are really irrelevant.

“How important really is it what happened in the market today? How important is it that Spain has whatever their unemployment percentage is?

“The news media is very effective at putting their news forward in a very sensational way. And they do that because that’s what sells the news. But it’s very easy to get distracted by those things.”

Bachrach says that while financial planning is a “helping-people business, it’s not the Red Cross – so you do have to be sure you’re doing business with people who are paying you adequately so you can be profitable and successful.”

Simon Hoyle is head of market insight for CoreData Research.
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