Today, the consulting industry is a wonderful opportunity to create a lifelong career that combines technical work with academic study and people interaction.
The FCA and its predecessors were also part of earlier problems – in monitoring consultancy firms, all it asked to see was proof of sales, not advice. If the advice to a client did not result in a product sale, it was irrelevant, and this meant that the technical aspect of the advice was ignored and not taken into account in industry statistics. .
Yesterday’s success in the industry was measured by the commission created, and it was a function of persuading people to enter into big premium contracts, whether pensions or insurance. Vendors handled technical support and provided customer-specific summaries – this helped sales advisors who were just that – salespeople. They qualified at FPC 1, 2, and 3 and no more, they didn’t need any technical skills to make money, just sales ability, and we saw sales stars.
It’s over, and rightly so. Today’s consulting firm needs four types of people, all with promising long-term futures.
The rainmaker opens doors, makes presentations, does corporate PR, maybe the gold course. His job is to make phone calls, introduce himself to the right people, and be adept at asking for introductions. The rainmaker is not an adviser; They used to do both roles and get the wrong advice because they could only work with a commission. Lack of technical ability is not a problem, a skilled rainmaker is a rarity and should be proud of the role.
The customer manager (CM) owns the client account – it’s more than para-planning, it’s a personal relationship with the client, the CM makes sure the admin runs smoothly, prepares and researches information for the advisor. The adviser may be the skipper, but the CM is the chief engineer.
Customer support (CS) ensures that the administrator behind the client is up to date and uninterrupted. Ensure client clock is properly administered, back office data is correct and reporting is accurate, client records are up to date, cash and investments are properly reconciled and the customer gets the information he wants, not just before grouped reports formatted identically for all customers.
The counselor owns the client: he/she is responsible for setting the client to relevant and realistic expectations, then during the annual update, to sit face to face and deliver the successful report. The advisor does not need to be an expert in investment, contracts, economics, comparative costs, taxation, trusts, insurance, family and contract law, end-of-life issues, but should have a good knowledge of all.
Most importantly, in today’s industry, the Advisor and CM must be numeracy-literate, proficient with Excel, and broad-reading. Everything we do in this industry revolves around numbers and while a rainmaker can bypass the maths GCSE, a counselor cannot.
Ours is an industry that does not require GCSE mathematics to be an adviser, to be allowed to direct a client’s lifetime savings, to direct that investment. Opportunity strikes here – those who know how to count and who can model customer scenarios in Excel are in demand, and it will only grow.
Baby boomers are the 14.3 million people you might consider cranky old people, but they are the ones with £3,000,000,000 in private pensions. review and compare investments. Fund managers are different, for advisors the key word is “demonstrate”.
There is no investment research dedicated to the retail investor which is why Chancery Lane does its own (income investing) so key advisers need to be able to sift through the marketing slime fund companies all offering institutional fund research based on asset allocation that simply doesn’t work at the individual level.
Doug Brodie is Managing Director at Chancery Lane Income Planners