Are we having fun yet?

Bear with me. Starting an essay with a Dr Seuss quote makes more sense than you may suspect. And, certainly more sense than many of the issues that financial planners have had to deal with in the past few years.

Remember back when this all started? If you are anywhere close to what the statistics tell me about the average financial planner, you are in your 50s and have been working at your profession for twenty or more years. And, if you’re a bit younger than that, just keep reading. Context is important.

Back in the 80s, when all this started, people were the same, but things were a bit more straightforward. The definition of sophisticated financial planning was using not one but four- count them- four different fund managers to invest your client’s money. You focussed on seeing your clients and making them happy, not on updating your Financial Services Guide. If you were really successful you’d have your very own fax machine. It wasn’t easy, but it was simple.

I started this reminiscing when talking with a client recently. John was telling me about a conversation he had with one of the co-owners of the business that he had founded. Now nearly 65, he had sold his interest five years ago to Tim for a modest but fair price. Now, Tim was about to on-sell it for a multiple many times what they had paid John. Tim had wondered if John would be upset or disappointed that he wouldn’t share in this bounty.

“That’s nice of him, but how could I be?” John said. “I would have had to have stayed in the business to get some of that. Instead, I’ve had 5 wonderful years that no-one can ever take away from me. I’ve travelled, spent time with my wife and family, and I still have as much money now as when I first sold. No, they can have their success. I don’t regret a minute of the last 5 years – they’ve been too much fun.”

John’s words made me think about my own journey as a financial planner for these past 5 or so years. Like many planners I know, this period has been the most challenging time of my career. You could use a lot of words to describe them, but ‘fun’ wouldn’t make the top of the list.

What have we lived through? A dramatic increase in regulation. Our professional calling at times hijacked by others for their own political agenda. People demanding more but wanting to pay less. You all know the list of woes that we have faced and in many cases been unfairly blamed for. Oh, did I mention the GFC?

I’m on a roll here, so allow me to continue: regulation and compliance has seen costs increase dramatically, yet people still only want to pay the same price we charged 15 years or so ago. Technology and experience has resulted in productivity improvements, but this hasn’t been enough to counter the margin squeeze most practices are experiencing. The breadth of knowledge we need to give good advice has increased exponentially whilst wisdom remains in scarce supply.

I think deeply and often about the business of providing professional financial advice. Running a financial planning business is an applied practice, where textbook theories have limited use. You are no help at all to your clients if you can’t stay in business long enough to be there at times when they need it most.

Personally, I feel that to thrive in financial planning, you need to either be a very focussed specialist or build scale. For me, you either needed to have four or more than 24 people if you were going to be a sustainable, competitive planning practice. My business chose the latter route, which doesn’t necessarily make us right or indeed, that it has been easy journey to make.

In fact the path of growth brings entirely new challenges that, frankly, none of the many ‘experts’ prepare you for. How do you as a planner make a transition from adviser to manager? How do you hand over client relationships without disenfranchising them? How do you get scale in your back office preparing advice without compromising that individual magic spark that is the hallmark of the best planner/client advice relationships?
And, assuming you get this right – how do deliver on this not just for a year, but for a decade?

John’s story reminded me of another client that built and then sold his own business. After being retrenched in his 50s, Bruce faced some big financial challenges and took them head-on. He was so successful, he could have sold out earlier. But, he loved what he did and it was tough to let go and let the new owner- his son- take over. Finally, his family convinced him to retire and go on a cruise at age 65 to celebrate. Soon afterwards, he was diagnosed with terminal cancer. A few weeks later, he sat in my office and made me pledge to always look after his wife after he was gone. Of course there was sadness, but there was no regret. He had lived and loved and even in hard times, laughed.

Life is short, and the work we do is important. At our best, we have a profound, lasting and positive effect on our clients’ lives. And, while the work and environment may no longer be easy, the changes that have happened have been wonderfully positive for the advancement of financial planning as a profession and the betterment of the community. We aren’t managed funds salespeople any more, we are trusted advisers that put our clients’ interests ahead of our own. How good is that?!

I am sure many of you reading this will have stories similar to Bruce’s and John’s. These are the personally extraordinary yet collectively prosaic stories of our lives. Stories that are immeasurably better for our clients and their families for the work that they do. It’s sometimes easy to forget this, because, despite their words, you won’t find acknowledgement or appreciation from government, regulators or commentators. But, if you are looking for it from there, you are looking in the wrong place. It’s in the lives of the clients across the table from you, people that are realising their dreams because of your dedication to your profession.

Let’s encourage each other by sharing that journey together. There are many more ways to provide financial advice than we have yet dreamed of; ways that will meet the demands of the market and the needs of the law. This next generation of Australians will be the most prosperous yet, and they need our help more than ever. It may be wet at times, and the sun may not always be sunny, but we are in control of the journey of our lives. Let’s choose to have some fun.

About Patrick Canion

Patrick is a co-owner and CEO of ipac Western Australia. A Certified Financial Planner, Patrick specialises in working with business owners and professionals. Overall, ipac Western Australia has 27 team members and over 1500 clients.

Patrick has a Master of Applied Finance and Investment degree, and is a graduate of the Company Directors Course. He is a director of the Financial Planning Association and the Future2 Foundation.

Married with two adult children, he likes skiing, Bikram yoga and dreams of one day having a single figure golf handicap.