There are twelve different criticisms cited in the report. However, these divide into five separate and very familiar categories:
- Regulatory obligations – poor execution of the statutory disclosures
- Sales process execution deficiencies – including inadequate fact-finding
- Failures in establishing customers’ attitudes to taking investment risks
- Product knowledge deficiencies
- Poor matching of available products and fund selections to the established risk attitudes of the investor
These are not difficult practices to correct. They are nothing new. The deficiencies have been seen many times before in the UK and with sustained acceptance of the need to squeeze out the poor practices, the sector can be and will be a better place to work, and a more attractive one for consumers.
All the analysis in the world will not tell us any more about why these practices are occurring in the sector than we already know. It’s all about one, or more of these three factors:
- Skill deficiency
- Knowledge deficiency
Using a process of elimination, it’s not that difficult to establish which of these three is/are the problem, and once a reliable diagnosis has been made, the remedy is relatively straight forward too.
- Cure knowledge deficiency with learning programmes;
- Develop skills through coaching
- Deal with poor attitudes through strong, decisive management
In the UK it has taken many years to get to where we are today. The UK financial planning sector is now better trained, more effectively managed and better rewarded for writing long term, profitable, quality investment business than at any time in history. The broking experience is more rewarding and reassuring for the consumer. But how did we get here?
How did we get here?
It all happened very quickly, once firms began to see the value in providing a more professional service and a culture based on long term client relationships rather than short term transactional business.
Mechanising the broking process, through the deployment of high value, low cost technology solutions, designed to help the broker, to reassure the firm and to make the buying experience for the consumer more educational, more enjoyable and more memorable, has revolutionised the way consumers and brokers interact. As a result, consumers are more actively and more confidently involved in their investment programme.
Thoughtfully engineered, integrated learning management systems, automating large elements of the knowledge training, and product knowledge refreshers have helped firms to evidence that brokers continue to surpass threshold knowledge standards. This has eradicated many of the problems which the UK consumer historically encountered.
The best part of all is that when a firm’s systems can evidence that its brokers have the knowledge, and under observation, demonstrate the ability to execute the process to the desired standard, if the problems continue to prevail, this can only ever be a matter of attitude. Bad attitudes can blight any industry or sector and only strong, willing management, coupled with a ‘top-down’ culture to ‘treat customers right’ will create the potent recipe for a sustained, successful and well respected financial services firm that a consumer investor really wants to engage with.
These leading edge technology solutions both to drive efficient, customer-centric investment broking processes, and to deliver efficient knowledge learning and supervision, are already available in Hong Kong for IFA / broker firms to take advantage of and eradicate poor sales practices.