Robin Powell

 

 

 

 

 

An experienced television journalist, Robin runs Regis Media, a UK-based content marketing consultancy which helps financial advice firms around the world to attract, retain and educate clients.

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Professional or salesperson: Which one are you?

September 29, 2016

 

I wrote the other day about financial advice being a profession, not an industry, and the need to change public perceptions accordingly.

 

So, when did people stop seeing advisers as professionals in the first place? The answer, sadly, is that financial advice has never been widely viewed as a proper profession in the same way as, say, medicine, law or accountancy are.

 

The reason is that, all over the world, advisers and product providers were a double act. Advisers earned a living from the commissions they earned from providers for selling their products — in many cases regardless of whether a particular investment was in the client’s best interests. In short, advice was a sales-driven business.

 

Thankfully, commissions are disappearing. In the UK, where I’m based, it’s now illegal for product providers to pay commissions to advisers. Similar rules exist in several countries across Europe, and the Fiduciary Rule recently interested in the US will at least provide consumers there with greater protection from conflicted advice.

 

But old habits die hard. As Paul Armson of Inspiring Advisers has said, there’s still a pervading sales culture within the advice profession. True, UK advisers no longer earn commission, but recommending funds and selling products has become such an important part of what they do from day to day that many are frankly struggling to redefine their rôle.

 

I read a brilliant article recently by Bob Veres, an adviser to advisers who’s based in California. In it sets out the difference between financial sales and financial planning. It’s essentially a follow-up to an earlier piece which Veres says met with a vehement response from those who “self-characterised” as salespeople, based on what he wrote. 

 

“Salespeople are not evil, or wrong.” says Veres, “they just aren’t the future of the planning profession. In order to go beyond being just a salesperson, you’ll need to change your service and compensation model.”

 

He then goes on to explain the difference between the “sales process” and “the professional process” in relation to the different aspects of financial planning — investing, premature death risk analysis, retirement planning and so on.

 

It’s thoughtful, honest and very well-written, and I would urge you to read it in full:

 

Bob Veres: Are you a salesperson or a professional planner?
 

 

 

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