My Dad the hero, Selling Shovels and the danger of paternal subordination

I love my Dad.

He’s far from perfect but he has been fundamentally important into shaping me into the man I am today and for that I’m really thankful!

Years ago my Dad was my hero.

Someone to look up to and admire.

Someone who always did the right thing.

Someone to aspire to be….

However whilst all of this is true I’ve found that as we’ve both got older the reality is a little more complicated. Now my dad and I disagree on loads of different subjects.

He comes from a generation where things were done differently.

He’s used to being part of huge industrial workforces and although I’ve been in those environments I now understand the power (and impact based on their scale) of a larger number of small and medium sized businesses.

He believes in the power of the gang. I believe in the power of the individual.

He believes that a large collective voice is powerful. I believe that a number of different interesting opinions, although potentially chaotic, makes the world a far more interesting place to live and work.

Weirdly, I think the relationship with my Dad is a lot like the relationship I’ve got with the profession I’m proud to be a part of.

Traditionally our industry (I believe we’re slowly moving towards being a profession, but not there yet!) has always had the feel of the parent / child relationship about it…

Big Banks tell bancassurance salespeople what to do and how to do it sometimes to the detriment of anyone but the bank.

Large life companies guiding Financial Advisers (Independent or otherwise) on the best way to make profit, manage their businesses and promote their propositions without truly trying to understand what the adviser (or firm) intends to achieve.

Networks promising to provide ‘umbrella’ solutions designed to make life easier for individuals to run their businesses but potentially making their lives both more expensive and unnecessarily difficult.

At one point in my career (and actually not that long ago) I would have comfortably accepted the fact, without argument, that in the world of Financial Services “bigger is better”.

I still know many financial planners and advisers who still do.

However the more I think about this subject I find myself coming to the conclusion that assuming that “Big Knows Best” is wrong and any form of dependence on either Large Financial Institutions, Life Companies or Networks opinions on how I should run my business, how I judge success and how to best to promote my proposition is fatally flawed.

I believe there are a number of reasons behind this (too many to detail here) however I just want you to consider this…

In the California gold rush of 1849, a few prospectors got lucky. A few did OK. Many failed….

….the guys who made the money consistently are the ones who sold the shovels.

The guys who sold shovels weren’t interested in prospecting for gold…the advice they did or didn’t give wasn’t based on helping the prospectors find more gold. Their interest was to sell more shovels.”

The interests of the shovel sellers and the prospectors couldn’t be entirely aligned.

It’s the same in financial services. The interests of large product providers and small and medium sized financial planning firms are never going to be entirely aligned.

The reason many of us use “Assets under Management” as a sign of achievement is, in part, because that’s how the large life providers define success.

For product providers that’s entirely correct (the definition of a successful shovel maker is selling more shovels). Within my business I’m not interested in playing that game.

Interestingly a lot of the people I admire. like  and respect work in or run large businesses, many of them working within the institutions I’ve talked about in this article.

People with an opinion. People who will listen, think and engage. People who are prepared to engage in intelligent debate with a desire to learn. People who understand that the status quo might not be the best way to continue and constant innovation might be better for all.

The reason I tend to admire and respect these people is similar to the reason I still love my dad….

We might disagree, often fundamentally, but I believe the way forward is mutual respect….not “paternal subordination”

As ever I’m interested in your thoughts….

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22 thoughts on “My Dad the hero, Selling Shovels and the danger of paternal subordination

  • Another good read Chris and one that resonates with me as I have been in some of the positions you describe, as I suspect have many who read this.

    I think it can be harmful not to allow individuals to express their opinion and to stifle debate. It can be extremely worthwhile to listen to others and share opinion.

    I recently aligned my business to what perhaps is best described as a collective partnership. We openly challenge each other. We argue ( in a constructive way ). We learn from each other. We respect each other.

    We are becoming stronger individually and collectively for doing so.

    Reply
    • Hi Paul,

      I agree….open honest and interesting debate (whether it’s popular or not) is surely a better way to go than stifling a debate which may help us as a profession.

      Thanks for your comment.

      Reply
  • A great article, Chris. You’ve articulately expressed what I have been thinking but unable to write down.
    I’m passionate about advisers reducing their links with providers -I dont think we should rely on them for CPD, etc, and I dont like them financing APFA, the PFS etc. I dont like them owning shares in advisory businesses.
    Maybe it is time for the advisory profession to move out and set up home on its own. Maybe we should fall in love with another profession, and have our own family. OK, so the analogy only goes so far…

    Reply
    • Thanks Philip. That’s high praise indeed!

      I’m with you on CPD. Independent learning should be that and the knowledge shouldn’t be clouded by a provider ‘perspective’.

      That’s not always the case but you need to ensure that you’re in a position where as an adviser (and business owner) you understand the difference!

      I’m going to save my thoughts in relation to conferences and the like for another article however I think you’re onto something about other professions….

      ….Whilst I’m not going to go as far as falling in love with my accountant (Clive’s a nice bloke…..I just don’t feel that way about him!) I do believe we can learn from their business model…

      Transparent retained recurring income paid by the client to provide a professional service is the model I believe makes most sense for my business.

      Why? That’s what accountants do….and the good ones (like Clive) know a thing or two about building profitable businesses.

      Reply
  • We don’t seem to like admitting it but what Chris describes was and for many is real life paternalism.

    You can hardly blame the people who pay the money either in wages or in commissions for wanting to control the debate.

    Listening and discussing views is fine until someone has to pay the bill .

    Real partnership conversations will only come when advisers have no connection to providers and are able to demand that providers demonstrate value in their products before they consider using them with their clients.

    Strange industry we work in with most simply wanting a little more from a slightly less odious paternalism on the part of providers.

    Reply
    • Hi Phil,

      Great comment!

      I agree that there is an issue when it comes to paying the bill….I’ve got a bit to say on this (having attended a couple of conferences this year where the bill is being firmly paid by these paternal firms). I’ll save my thoughts for another article.

      I think the move from the ‘we need you’ (paternal) to the ‘you need us’ (independent) approach is a mindset change. One that I’ve gone through relatively recently….however I agree that most will just want ‘slightly less’ paternalism.

      Reply
  • Great blog, Chris. However, I must confess that I don’t recognise the world you describe. I don’t feel part of an industry shared with providers at all.

    In 2001 or so, a young broker consultant from Sun Life came to see me. He had a questionnaire, the results of which would be used to produce a report which would help me run my business. I used to be a broker consultant, so I gave him some time.

    He began to go through his form. After a short while I had to explain that I couldn’t answer his questions because I didn’t take initial commissions, I charged time. I saw clients regularly for reviews. I charged a retainer fee. The questions simply didn’t accommodate my business model.

    The point I’m struggling to make here is that we can choose our friends but we can’t choose our family. Like you I listen to my Dad’s advice and choose the bits that work for me. There’s very little I have ever found providers can give me. I haven’t seen a broker consultant in many years and stopped reading the pink papers, with their endless articles about provider execs changing jobs, even earlier. I’d happily engage with a provider with something interesting to say, but that hasn’t happened for quite a long time now!

    Reply
    • Thanks for the reply Chris.

      I think the fact that you don’t recognise the world I describe says a lot about the maturity and intelligence of you and your business….I’m slowly coming to my own realisations and hopefully will gradually continue to make the changes I need to.

      I see your point about being able to choose your friends and not family.

      However regardless of whether you like it or not….utilising a savings or investment vehicle (or other product) to achieve our clients life’s aspirations means that product providers are more like family than friend.

      On some level we need them to help our clients achieve their goals.

      However what we could do (and what I try to do) is engage with individuals from product providers to try to explain what we really want (and don’t want) as businesses.

      That’s rarely the broker consultant (who is incentivised to ‘sell shovels’) and instead is normally someone involved in (or has influence around) strategy.

      Will it make any difference….I’m not sure! But it might be fun to try….

      Reply
  • I love your writing Chris, the way you bring together three seemingly unrelated topics into a coherent point, it’s great.

    One of the (many) reasons I left advisory world for provider world was so that I could earn more money than a small advisory firm could ever pay me, no matter how successful the firm. This is a sign in itself of how the two models are structured so very differently.

    I’m quite a naive person who was and still is genuinely shocked by the thousands, sometimes hundreds of thousands of pounds charged by some network and national IFA firms for providers to access their members. I’d love my firm to take a moral stance on this and refuse to engage with these firms, or refuse to pay their price but it would be commercial suicide whilst all the other providers continue to cough up.

    Until the FCA steps in to ban these payments completely it is what it is. I genuinely feel there are some networks and nationals who would simply fold if provider payments were banned even though the FCA are clear that such payments shouldn’t be used to prop a business up.

    I love my job, it gives me opportunities to meet and engage with wonderful people like the members of adviser lounge. But until the culture at the top changes we need to sell hard to justify the price to play.

    Reply
    • Most have stopped or reduced payments. The idea that everyone pays or that something bad will happen if you don’t is a myth.

      Reply
      • Thanks Kath and Phil (and thanks for the compliment on my writing Kath – it’s appreciated),

        I like the fact that there both of you have two different perspectives on the same issue although I’m wondering from both your comments how large the issue of provider payments to nationals and networks are…

        This issue in my opinion comes back to the same factor. Transparency and layering.

        If we as a profession (including providers, financial planners & advisers, networks and support providers) worked hard to be entirely clear we could potentially build an asset with consumers of our services which is still sadly lacking…..trust.

        or maybe I’m just being naive.

        Reply
  • I love your writing Chris, the way you bring together three seemingly unrelated topics into a coherent point, it’s great.

    One of the (many) reasons I left advisory world for provider world was so that I could earn more money than a small advisory firm could ever pay me, no matter how successful the firm. This is a sign in itself of how the two models are structured so very differently.

    I’m quite a naive person who was and still is genuinely shocked by the thousands, sometimes hundreds of thousands of pounds charged by some network and national IFA firms for providers to access their members. I’d love my firm to take a moral stance on this and refuse to engage with these firms, or refuse to pay their price but it would be commercial suicide whilst all the other providers continue to cough up.

    Until the FCA steps in to ban these payments completely it is what it is. I genuinely feel there are some networks and nationals who would simply fold if provider payments were banned even though the FCA are clear that such payments shouldn’t be used to prop a business up.

    I love my job, it gives me opportunities to meet and engage with wonderful people like the members of adviser lounge. But until the culture at the top changes we need to sell hard to justify the price to play.

    Reply
    • Most have stopped or reduced payments. The idea that everyone pays or that something bad will happen if you don’t is a myth.

      Reply
      • Thanks Kath and Phil (and thanks for the compliment on my writing Kath – it’s appreciated),

        I like the fact that there both of you have two different perspectives on the same issue although I’m wondering from both your comments how large the issue of provider payments to nationals and networks are…

        This issue in my opinion comes back to the same factor. Transparency and layering.

        If we as a profession (including providers, financial planners & advisers, networks and support providers) worked hard to be entirely clear we could potentially build an asset with consumers of our services which is still sadly lacking…..trust.

        or maybe I’m just being naive.

        Reply
  • Another good read Chris and one that resonates with me as I have been in some of the positions you describe, as I suspect have many who read this.

    I think it can be harmful not to allow individuals to express their opinion and to stifle debate. It can be extremely worthwhile to listen to others and share opinion.

    I recently aligned my business to what perhaps is best described as a collective partnership. We openly challenge each other. We argue ( in a constructive way ). We learn from each other. We respect each other.

    We are becoming stronger individually and collectively for doing so.

    Reply
    • Hi Paul,

      I agree….open honest and interesting debate (whether it’s popular or not) is surely a better way to go than stifling a debate which may help us as a profession.

      Thanks for your comment.

      Reply
  • Great blog, Chris. However, I must confess that I don’t recognise the world you describe. I don’t feel part of an industry shared with providers at all.

    In 2001 or so, a young broker consultant from Sun Life came to see me. He had a questionnaire, the results of which would be used to produce a report which would help me run my business. I used to be a broker consultant, so I gave him some time.

    He began to go through his form. After a short while I had to explain that I couldn’t answer his questions because I didn’t take initial commissions, I charged time. I saw clients regularly for reviews. I charged a retainer fee. The questions simply didn’t accommodate my business model.

    The point I’m struggling to make here is that we can choose our friends but we can’t choose our family. Like you I listen to my Dad’s advice and choose the bits that work for me. There’s very little I have ever found providers can give me. I haven’t seen a broker consultant in many years and stopped reading the pink papers, with their endless articles about provider execs changing jobs, even earlier. I’d happily engage with a provider with something interesting to say, but that hasn’t happened for quite a long time now!

    Reply
    • Thanks for the reply Chris.

      I think the fact that you don’t recognise the world I describe says a lot about the maturity and intelligence of you and your business….I’m slowly coming to my own realisations and hopefully will gradually continue to make the changes I need to.

      I see your point about being able to choose your friends and not family.

      However regardless of whether you like it or not….utilising a savings or investment vehicle (or other product) to achieve our clients life’s aspirations means that product providers are more like family than friend.

      On some level we need them to help our clients achieve their goals.

      However what we could do (and what I try to do) is engage with individuals from product providers to try to explain what we really want (and don’t want) as businesses.

      That’s rarely the broker consultant (who is incentivised to ‘sell shovels’) and instead is normally someone involved in (or has influence around) strategy.

      Will it make any difference….I’m not sure! But it might be fun to try….

      Reply
  • A great article, Chris. You’ve articulately expressed what I have been thinking but unable to write down.
    I’m passionate about advisers reducing their links with providers -I dont think we should rely on them for CPD, etc, and I dont like them financing APFA, the PFS etc. I dont like them owning shares in advisory businesses.
    Maybe it is time for the advisory profession to move out and set up home on its own. Maybe we should fall in love with another profession, and have our own family. OK, so the analogy only goes so far…

    Reply
    • Thanks Philip. That’s high praise indeed!

      I’m with you on CPD. Independent learning should be that and the knowledge shouldn’t be clouded by a provider ‘perspective’.

      That’s not always the case but you need to ensure that you’re in a position where as an adviser (and business owner) you understand the difference!

      I’m going to save my thoughts in relation to conferences and the like for another article however I think you’re onto something about other professions….

      ….Whilst I’m not going to go as far as falling in love with my accountant (Clive’s a nice bloke…..I just don’t feel that way about him!) I do believe we can learn from their business model…

      Transparent retained recurring income paid by the client to provide a professional service is the model I believe makes most sense for my business.

      Why? That’s what accountants do….and the good ones (like Clive) know a thing or two about building profitable businesses.

      Reply
  • We don’t seem to like admitting it but what Chris describes was and for many is real life paternalism.

    You can hardly blame the people who pay the money either in wages or in commissions for wanting to control the debate.

    Listening and discussing views is fine until someone has to pay the bill .

    Real partnership conversations will only come when advisers have no connection to providers and are able to demand that providers demonstrate value in their products before they consider using them with their clients.

    Strange industry we work in with most simply wanting a little more from a slightly less odious paternalism on the part of providers.

    Reply
    • Hi Phil,

      Great comment!

      I agree that there is an issue when it comes to paying the bill….I’ve got a bit to say on this (having attended a couple of conferences this year where the bill is being firmly paid by these paternal firms). I’ll save my thoughts for another article.

      I think the move from the ‘we need you’ (paternal) to the ‘you need us’ (independent) approach is a mindset change. One that I’ve gone through relatively recently….however I agree that most will just want ‘slightly less’ paternalism.

      Reply

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