CFP International Forum - 8 April 2008

It was interesting to get a perspective of where New Zealand is positioned on the international stage of financial planners at the recent forum in Christchurch.

The forum had representatives from Australia, South Africa, United Kingdom, United States in addition to attendees from other countries.

The number of Certified Financial Planners (CFP) has grown from 42 in 1973 to over 111,000 in 2007. New Zealand has 397 CFPs.

David Strege - United States
I enjoyed listening to David Strege who spoke about becoming a lifetime trusted advisor.

He shared the formula for calculating trust:

Trust = (Intimacy + Credibility + Reliability) / Self-orientation

Clients rate each of these values on a scale from 1 to 10 (1 is the lowest, 10 is the highest). The maximum score is 30.

For example if Intimacy is 7, Credibility is 9, Reliability is 8, and Self-orientation is 2, then Trust is rated (7+9+8)/2 = 12.

Further information is available at www.trustedadvisor.com

David also made the comment that money itself is worthless, unless it is spent on something that is of value.

John Holland - Securities Commission
It was interesting and comforting to hear the commission talk about the approach they are taking to work with advisors to protect investors. He referred to an illegal investment in 2001 as the reason for the disclosure regime.

Group panel discussion - Interesting points
Australia's main issues are:
- Regulation & licensing.
- A product-based (rather than advice based) system.
- Clients paying fees vs companies paying commission.
- Business costs.
- Recruitment, remuneration, retention and succession.

South Africa's main issues are:
- 48 million people, but only 5 million tax payers.
- Upfront vs renewal commission.

United Kingdom's main issues are:
- Strong sales focus from product providers vs advice focus.

United States main issues are:
- Regulation.
- New clients.
- Time management.
- Lack of effective regulation despite state licensing.
- Costs (5% spent on rent, 7% spent on regulation).

Hon Lianne Dalziel - Minister of Commerce
The minister's full speech is available on her website. Note her final statement where she will keep repeating the need for investors to be wary of dealing with anyone providing financial advice who is not a member of a professional body.

The timeframe for regulation was 2010. Members of professional bodies should feel confident about the changes. The goal is to grow investor's confidence.

Further information

You can find out more about the Financial Planning Standards Board at www.fpsb.org

Copy of the slides are available at www.ifa.org.nz under the members section.

Recent article entitled Australian advisers do it better

Professional membership for Financial Advisors

On the 29th of February 2008, investment advisors in New Zealand will need to provide a Disclosure Statement before giving advice.

It's a good idea for advisors to be a member of a professional organisation.

There are a number of organisations to choose from. The links below take you to the membership application areas of each organisation.

Australian and New Zealand Institute of Insurance and Finance (click)
Their website describes the organisation as the leading membership body for insurance and financial services professionals in the Asia Pacific region. Institute members belong to a community of more than 12,000 insurance and financial services professionals who are respected for their up-to-date skills and knowledge and integrity.

Institute of Financial Advisers (click)
The Institute of Financial Advisers' website states that they are the professional body for insurance advisers, investment advisers and financial planners. The Institute is an industry leader, representing over 1400 financial advisers throughout New Zealand.

Life Brokers Association of New Zealand (click)
Their website states that this organisation represents professional independent life insurance brokers in New Zealand and facilitates the professional development of life brokers and sets a standard of excellence within the industry.

Professional Advisors' Association (click)
According to their website, the PAA's primary purpose is to provide a full range of Professional Association services to its members (life insurance, investment and mortgage advisers).

Society of Independent Financial Advisors (click)
Their mission statement is to ensure members of SIFA provide the public with independent financial advice while upholding the highest professional and ethical standards.

In addition to these organisations, there are also industry bodies and associations.

Brand you!

What 3 things will your client remember you for?

What 3 things do you want your client to remember you for?

If you can’t answer these questions for yourself, you can’t expect your clients to answer it either. These 3 things will not only anchor you and your business in the client’s mind as someone they want to do business with, but also establish a solid foundation for them to refer you to their clients, friends and family.

The world and our lives are full of brands, we deal with brands every day and your brand is no different, whether it’s you or your business – it stands for something (whether you have designed this intentionally or not).

Reflect on businesses you respect. What are their attributes that stick in your mind? Why would you refer them to people you know?

Spend a few minutes thinking about what attributes you would like your clients to mention when describing their experience to others, but also think about what your clients are currently saying.

Are they talking about:
· Added value
· Ambitious
· Can-do attitude
· Caring
· Clear
· Efficient
· Fast
· Friendly
· Good value
· Great service
· Helpful
· Integrity
· Knowledge
· Personal service
· Positive attitude
· Professionalism
· Prompt
· Reliability
· Respect
· Responsiveness
· Stable
· Trustworthy

Hopefully it’s not:
· Average
· Boring
· Busy
· Expensive
· Moody
· Rude
· Sloppy
· Time wasting
· Unhelpful
· Unreliable
· Untrustworthy

You will be able to come up with more! There’s no right or wrong answer (although most people I know would want the words in the top list used more often) and you might find different clients appreciate different attributes.

If you’re having difficulty working out the 3 things that stand out, just ask people who know you and know your business. Although many people can be reluctant to provide honest, negative feedback, they will provide you with an external perspective on your positive attributes. You can always ask “Is there anything I can do better?” which will help you improve and allow them to provide constructive feedback (remember not to argue with any points they raise – it’s their perception and for them, their reality).

So, when you go to your next appointment, ask yourself what are the 3 things you want your client or prospect to feel or believe after the meeting. You may even want to build this into your discussion. For instance “Hi, I’m Joe from ACME Services, we provide our clients with personal, prompt and professional service”.

Having these 3 attributes top of mind will also help you with your “elevator speech” (a short introduction that explains what you do and why someone would do business with you) and lead to new business opportunities.

I encourage you to manage and value your brand like the top brands in the market place that spend millions on creating an image, ensuring that the choices you make and the behaviours you display are consistent with the image you want to create.