Professionalism, process and peace of mind

Financial planning and the professionalism of the industry is under challenge. The challenge is not from existing clients who are actively engaged in the advice process. These clients overwhelmingly regard their advisers in the highest terms.

In fact, a recent AFA white paper, researched by the Beddoes Institute and sponsored by Zurich, found that the average financial adviser attains net promoter scores in the 50 out of 100, when rated by clients. Further, advisers who we would regard as at the top of their game, who have developed and deliver a client centric experience, receive advice scores in the 90’s.

Rather, the challenge comes from a combination of sources. Driven to an extent by consumer dissatisfaction and regulatory concerns over standards, the industry is undergoing the FOFA series of reforms aimed at increasing professionalism and improving the quality of advice. With this focus on the industry has been an illumination of examples of best practice and also practitioners who are not making the grade. That is what a reform process can deliver. But what’s important to remember and to convey to consumers is that the vast majority of advisers enhance the lives and financial well-being of Australians.

The well-being of individuals has become a measure of the societal progress of populations alongside measures such as GDP. Life satisfaction measures focus on an evaluation of an individual’s life, by asking “overall, how satisfied are you with your life?” Individuals arrive at a summation after considering a number of important aspects such as health, family life, social relationships and finances. It follows then that financial planning goes beyond the giving of insurance and investment advice. The process of financial planning delivers a strategy that takes into consideration all aspects of lifestyle, goals and requirements to help individuals reach their financial goals effectively and efficiently. This process of financial planning when delivered in a sequential and the role of the financial planner within it is as follows:

• guides individuals in a goal oriented and systematic way;
• formalises behaviours for accomplishing outcomes and;
• provides a means of assessing progress.

Looking deeper at what drives human behaviour, some studies have identified at least four hardwired innate drives that shape our behaviours and choices. Those elements - the drive to acquire, learn, bond and defend- fit neatly into the advice process. Advisers educate clients as part of a discovery process to illuminate what is important to the client, and provide strategy solutions that allow clients to set a foundational platform to build towards their well-being goals and desired outcomes.

It flows then that the provision of best-practice financial planning is likely to have positive influences on individuals’ well-being and life satisfaction. The actual process of planning and the manner in which it takes into account goals, wants, values and motivators is core to not only the success of the planning outcomes but the overall well-being of the client.

Crucial then, to maximise the outcomes of the process, is to unpack each step of the financial planning process and discover what best practice looks like, what the client experience is and what it needs to be during the process. In doing so, businesses can deliver repeatable, sustainable and measureable processes to enhance client outcomes. It is these leading advisers that are winning the hearts and minds of clients and delivering not only financial but psychological wellbeing outcomes.

About Andy Marshall

Andy Marshall is head of sales strategies and research, life risk, at Zurich Financial Services Australia.

A sought-after speaker and commentator, Andy often presents seminars to financial advisers and licensees on topics including client psychology, sales engagement, team motivation and advice best practice.

He formerly held business development roles at Asteron Life and AXA and was a private client adviser at the Trust Company of Australia and manager, financial planning, at the National Australia Bank.