The Rise Of The Consultant

It’s human nature to compare oneself to people you perceive to be more successful than you. Social media has made this worse, as outlined in an excellent blog from the ever self-effacing Mel Kenny.

It’s an old marketing approach of course. Create the impression that others are better than you, then offer the product or service that can enable you to achieve such heights yourself.

Since RDR there seem to have been a plethora of consultants and firms that have sprung up to tell advisory practice owners how to run their firms. ‘Just do it like I tell you’, they imply, ‘and and you too can have a business which is as successful as all our other clients’.

There seem to be so many of them now, all with secret knowledge that will save us poor IFAs from ruin and transform our practices. If it carries on this way in six months time there may well be more consultants than there are regulated firms.

I’m tempted to propose that the FCA should regulate consultants who advise on the advisory sector. That’d learn ’em (as we say down here in Bristol).

Now, there is a great deal of common sense and good practice coming from these consultants, lots of which is to be found on this very site. But my issue is with the idea that any one way is the right way. That any particular changes are necessary and essential. How do we know what they are proposing is right for us? 

In 2006 I had a meeting with a chap from a management consultancy firm (names removed to protect the incompetent, but he was Australian). I thought he was coming to see me to network, to consider common ground and whether we might introduce clients to each other. Turns out he was actually there to pitch for me as a client. He asked me a few questions about my business model, how being fee based worked. But only a few.

He then spent twenty minutes telling me I should be commission based, like the Australian model, that there was no money in being fee based, and that the transactional model would earn me more money and was the future for the industry. 

At times such people make you feel like you are in Monty Python’s argument sketch. “Look, in order to sell my consultancy advice to you, I have to take up the contrary position.” “No you don’t.” “Yes I do!”

But how do you know that other businesses which have successfully used these ideas had the same objectives as you? I tried to explain to the Australian management consultant that I wasn’t interested in high commissions now, I wanted a loyal client base, high repeatable income and a business with value. I wanted to sleep at night, not worry about the next sale, and was content to sacrifice earnings today for predictable long term income. He didn’t hear me, probably because he had no experience of such a model.

I stress, I’m not saying the business models and ideas that consultants and guru advisers propose are wrong or don’t work. I’m just suggesting that the temptation to think the grass is always greener on the other side can be overcome by going over to the other side and having a look. But an alternative might be to get a better understanding of what kind of grass you want to eat in the first place.

Chris Budd is a qualified business coach. That fooled you, didn’t it. You thought he was going to mention his novel again.

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8 thoughts on “The Rise Of The Consultant

  • Chris. You’ve just written what I’ve been thinking for sometime. Don’t get me wrong. There are consultants and there are consultants! Those for example who specialise in compliance in my experience have been invaluable. There’s a great guy who taught me about T and C supervision!

    However, I remain sceptical about “consultants” who return from an apparently highly successful IFA career. So successful apparently that for philanthropic reasons they are hell bent on sharing the love! Maybe I’m cynical for all the wrong reasons.

    However, I have seen evidence of many an oversold story of financial success.

    My advice. Join a study group packed with IFAs you respect and you know are successful. I attend one every quarter and always come away with at least one nugget of gold.

    Great article!

    Paul

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  • I agree in the most part with you. Keeping an open mind is important. However, you could also substitute ‘consultant’ for ‘financial adviser/planner’ and IFA for investor and it would read well also. Are advisers any less entrenched in their views than some consultants? Have a look at the trade blogs.

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  • For the record, it wasn’t this Australian. And I’m British now anyway.

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    • @Brett Davidson

      I’ve never met, but I’m really glad you cleared that up.

      I don’t know how many Australian IFA consultants are out there, but well, assumptions can easily be made if you’re the only ‘one in the village’. You are the ‘only one in the village’, right? I really like the material you do on Bright Talk, and it’s cost me naff all and been helpful to improving my service. I’m not saying it’s all stuff I would or could use, just like material from that ‘guy with the yacht’, it is helpful discovering what we want our business to be. I don’t recall this industry being that evident back in Aus.

      I suppose this argument comes back to service and competence Chris, just as the public says ‘I met an IFA once and he/she was rubbish’. This consultant may not have been doing a good job full stop, but the concept of having someone give a second opinion is useful. I’ve been to seminars from other consultants too, and heard stuff I hadn’t considered. I’m not in their market, pockets too shallow you see, but many have at least had something helpful. How much I would pay, like our own dilemma, is the million dollar (£) question?

      Just a thought, and thanks for the blog.

      PS: Brett, you’ll need to convert back to ‘Aussie’ status 8th June 2015; I’ve got a good feeling about this tour.

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    • Confirmed! Didn’t mean to cause any confusion, Brett, I only mentioned he was Australian (and non-industry) because of the reference to the Australian model later.

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  • What puzzles me about industry consultants of every type is their universal reliance on fear of the regulator to sell their services.

    The adviser side of the industry has been struggling with the biggest ever change of its source of remuneration and yet I cannot recall seeing any consultant giving advice about tackling the problem.

    Lots of stuff about business administration, segmenting etc. but absolutely no substance at all on the most important issue.

    Or perhaps they just don’t know how to do it either ?

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  • As a former IFA and now an industry consultant I welcome this discussion.
    It’s an interesting time for the industry and with my experience at the UK and International adviser front line and with the regulatory direction of travel and risks involved, I can say hand on heart that i’m proud to be able to support advisers and planners, product providers and wealth managers in their continued journey.
    With any profession you gain your supporters and retractors, I think with any ‘non-regulated’ support service the benchmark should be on experience, qualifications and know how. At the end of the day it’s about working as a team towards the business and personal goals.
    As the old adage goes give a consultant a watch they tell you the time, but they may also help you manage that time more efficiently and productively

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  • Good article and some excellent comments.

    There is nothing wrong with consultants or industry commentators or any professional help. My issue is with the “my way or the highway” approach. I can’t remember how many times over the last ten years I’ve read that I must do this, or that, charge like this, don’t deal with those clients – or you’ll go out of business. I don’t do those things or charge like that, and I deal with all clients – and the business is still here, growing strongly with a healthy profit margin. No doubt the retort will be “but it could be so much better”, but my view is there are many different ways to run a business, charge clients, be independent. The fact that my way looks different from others doesn’t make it any less valid.

    Its important to keep an open mind and listen to ideas, but that would be easier if they were delivered a little less evangelically.

    But still a good article.

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