My route into financial advice wasn’t exactly what you would call typical. Although I had a fondness for numbers, the early part of my working life was spent in my family’s fruit-and-veg firm.
The first major hint of what lay ahead came when I reached my mid-20s. With the Goodwins having somehow failed to significantly disrupt the world of fresh produce, I belatedly headed off to university.
Armed with a background in sales and a degree in actuarial mathematics and statistics, I figured financial services would be a decent fit for me after graduation – and so it proved. I found my calling as an adviser.
What I never envisaged back then was that I would one day lead a business. I knew I wanted to be in control of my life, my time and my earnings, but I didn’t really see myself as a boss.
But that’s how things panned out – I ended up running my own company. Crucially, I also stopped being an adviser.
This rapid-fire run-through of my career to date isn’t intended to serve as some kind of “lost soul made good” story. I offer it simply to illustrate two important lessons I’ve absorbed over the years.
The first is that we should never stop learning. This is why I’m a big believer in advisers continuing to add strings to their bows – not just by augmenting their knowledge base but by enhancing their talents for adaptability, cooperation, critical thinking and other “soft” skills.
The second is that there exists in our profession a phenomenon I call “the adviser’s dilemma”. This merits a little more explanation, because it’s a challenge an ever- growing number of advisers face.
Out of the frying pan…
I’ve been in this game long enough to know many advisers are deeply unhappy in their work. They’re stressed, overburdened and often scarcely capable of servicing the clients they already have – let alone ready to take on more.
Some become convinced the answer is to establish their own directly authorised business. They see this as a silver bullet for all their woes – a platform for rediscovering whatever it was that once made them want to enter our industry.
Yet this notion is usually founded on a belief that the skills conducive to providing financial advice can be used to head up a company. This kind of thinking is idealistic, to say the least.
The reality is that not all skills are transferable. For instance, a Premiership footballer has scant reason to expect he could carve out a living as a brain surgeon when he hangs up his boots.
If that example sounds slightly facetious, try this: a Premiership footballer shouldn’t even imagine he’ll automatically master the art of matchday punditry. What if he’s prone to freezing in front of a camera or as articulate as a house brick?
The point is that nothing can be taken for granted, which is why advisers would be foolish to assume they’re innately equipped to take the reins of a business – even their own. Directing, training, monitoring and motivating others isn’t a knack too many people are born with, as I know only too well.
On the one hand, then, an adviser can remain firmly focused on providing advice – a fate many seem barely able to contemplate. On the other, an adviser can attempt to set up and manage a company – a task for which most are spectacularly unqualified.
This is the dilemma I mentioned earlier. And it’s a dilemma in the strictest sense of the word, in so far as it consists of two equally unattractive options.
A third way
There are other factors to consider in this quandary. Most advisers who launch a directly authorised business do so in the hope that growth will follow, but this trajectory can bring further problems.
Perhaps most obviously, the administrative pressures can be immense – particularly as more advisers are added to the fold. Regulatory requirements become increasingly onerous and resource-intensive. It’s alarmingly easy to suddenly find yourself overwhelmed.
It was in light of this eventuality that I stopped being an adviser. I quickly realised I couldn’t carry on giving my clients the best possible service and be an effective leader at the same time. Something had to go.
I also soon discovered no-one can achieve anything meaningful on their own. Leadership goes hand in hand with collaboration. I was fortunate to be surrounded by a great team, many members of which came from outside our industry.
Looking back, it strikes me that a lot of pieces had to fall neatly into place to complete the puzzle. Confronted by the adviser’s dilemma, I made my choice. I cultivated the skills necessary to run my own company. I recruited wisely. I was probably pretty lucky, too.
It could happen to you, as they say. Yet it’s worth noting that unhappy advisers have a third option, which is to partner with a business that’s already strong on the client-facing side.
This can allow advisers to concentrate on what they do best – delivering great service – while benefiting from a range of resources geared towards the “heavy lifting” of advice provision. I think of it as direct authorisation without the burden, independence without the research demands and support without the costs.
I fully appreciate the appeal of aiming higher and charting a new course, as I’ve done it a few times myself. There’s no doubt that ambition is a wonderful thing. But it’s vital to recognise our inherent limitations – and to understand there are potentially compelling means of overcoming them.
Andrew Goodwin is co-founder and CEO of Truly Independent and author of ‘The Happy Financial Adviser’.
