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Can deconstructing advice improve the client experience?

Paul Kearney, founder and principal, Kearney Group Financial Services

A wall running the length of the Kearney Group boardroom in the Melbourne suburb of Abbotsford is adorned with a deconstruction of the financial advice process, its multiple steps and processes, and their relationships to each other.

At first glance it’s difficult to tell whether it’s a work of a genius or a fully fledged conspiracy theorist, but closer examination reveals it as part of a fundamental reimagining of how an advice firm could be organised to deliver its services.

Its aim is to start the process of reorientating the advice business so the client is served by internal teams of professionals bringing different perspectives and expertise to bear. It’s more than just a “multi-disciplinary” approach; it aims to overcome the issue of a client being handed around from professional to professional within the firm, and to instead deliver a service to the client that transcends the various professional boundaries of the individuals inside the business.

Paul Kearney, founder and principal of Kearney Group, says the delivery of a professional service like financial advice is currently highly dependent on the perspective of the person delivering it, and the professional construct within which they operate.

“You’re an accountant, or you’re a financial planner, or you’re a such-and-such and your view on what advice is and what you can do is very much constrained by the boundaries of the profession as it is set up for you,” Kearney says.

“And that’s OK, but if you ask the key constituents in the community what they need, you might come at it from a different angle.”

Households and small businesses 

Kearney says financial planners and public practice accountants principally serve households and small businesses. What “financial advice” means to each of those groups depends who you ask: an accountant, a financial adviser, or the clients themselves.

“If you take the view as to what a household needs in respect of financial advice, you get a different answer if you ask a financial planner what they need than if you ask an accountant what they need,” he says.

“[For] a business owner [and] what they need in respect of financial advice, if you ask an accountant…they’ll give you an answer; and if you ask a financial planner they’ll probably barely be able to give you an answer at all.”

“There’s this really interesting other space that we’re
looking closely at, which I think is utterly untouched.”

Paul Kearney

Kearney says a challenge for financial services providers is to create client-focused teams, avoiding a scenario where a client is passed from one professional to another according to what service or aspect of advice is required.

This is likely to become a bigger issue in future as more small business owners seek financial advice, because the needs of the business and the business owner’s household often cannot be disentangled. Advice firms will increasingly need to cater to the individual’s entire suite of needs, which presents organisational challenges even for so-called multi-disciplinary firms.

“There’s this really interesting other space that we’re looking closely at, which I think is utterly untouched, and that’s the connection between the business and the household,” Kearney says.

“Every small business has a connected household. And a professional may say, well, that’s not my domain, but for the small business owner it’s their real world. It’s all intertwined. You can’t look at their business without looking at their household, and you can’t look at their household without looking at their business.”

A blueprint from complexity

As the deconstruction of the advice process on the Kearney Group boardroom wall illustrates, financial advice broken down into its constituent parts is a complex process. But identifying each component, who delivers it, to whom, and how, will eventually form a blueprint that Kearney believes will lead to a better way of delivering advice.

“There’s a massive challenge in doing all of this, in how you organise yourself, how you arrange yourself organisationally to meet his need,” he says.

“From a regulatory point of view there are roadblocks put in the way for how you deal with this need. But in the finish, whatever the real challenge is, that’s the challenge that needs to be met, not some construct that’s set in the past that you have to deal with.”

Ultimately, Kearney says, how a client experiences advice “should be vastly different, and much closer to what they actually think they need”.

“They want financial advice. They’ve got these questions, and so often the questions are cross-disciplinary questions. How do I organise my debt? You can come at that from three different directions: there’s a mortgage broker perspective, a financial planning perspective and a tax perspective. Who’s the ‘owner’ of that expertise?”

“The client will experience the contact and the care and the
understanding and the knowledge from the joint professionals.”

Paul Kearney

Kearney’s thinking reflects a trend emerging in the delivery of medical services. Rather than a patient consulting, say, an oncologist, and then being passed on to a neurologist – or whatever specialists are considered necessary – a hospital might bring a team of specialists together to consider the patient’s condition, share insights, and co-operatively produce an optimal treatment plan. It requires those specialists to be willing to work together, and set aside professional competitiveness or jealousies, with the aim of producing the best result for the patient. 

“At every intervention with a client, every time the client is seeing you, if people are organised as teams centred around the client, what should happen if professionals are seeing it as a multi-disciplinary thing they’re doing for the client, the client will experience the contact and the care and the understanding and the knowledge from the joint professionals as opposed to each of the individual professional lines,” Kearney says.

“You’re always being looked at through that joint lens. And the professionals will learn a lot from working with each other as opposed to just passing the situation backwards and forwards.”

A real challenge

Kearney says the task of reorganising an advice firm to do this is a real challenge, with few precedents.

“I can’t find evidence of it being tried,” he says.

“People talk about ‘multi-disciplinary’, and they’ll talk about advisers working together, but they’re not organisationally structured together. I’ve not come across any instances of that yet.”

While the medical profession has much to commend it, and much an emerging financial planning profession can aspire to emulate, Kearney is concerned that financial advice might be forced to go the same way as medicine in other, unwelcome ways, insofar as how its services are delivered to consumers. Kearney believes the increasingly transactional nature of the public’s relationship with their general practitioner is not a good for patients, and not a good model for advice.

“People talk about ‘multi-disciplinary’, and they’ll talk about advisers
working together, but they’re not organisationally structured together.”

Paul Kearney

Outcomes for patients are often determined by the infrastructure of the system in which doctors work, and Kearney believes advice is being driven the same way. Medicare is, he says, “a fabulous scheme, had to be implemented, great for the community in terms of delivering universal health care”.

“But it’s a dance – it’s the infrastructure that is indelibly woven into everything that doctors do,” he says. “It’s in their mind every single day, and it’s got some really poor outcomes.

“They’ve taken medicine from being something that should be transformational, and they’ve made it transactional. My great fear with financial advice is that’s exactly what’s going to happen, because we have regulation and incumbent tools, software, et cetera, that restrict what happens and will shoehorn advisers into providing things in a particular way that’s safe for them and they can kind of make a buck.”

‘Stuck in a maze’

Like medical professionals, financial advisers seek to provide transformational advice, Kearney says, but increasingly find themselves “stuck in this maze” governed by legislation which is really all about financial product advice. It can get in the way of trying to reorganise an advice business to accommodate teams of professionals focused on the client, Kearney says.

“The risk that that whole industry runs…is it ends up being like the medical profession and it ends up being transactional because it’s the only way that you can deal with the machinery that sits underneath it,” he says.

“That’s an unintended but very real consequence. When you have to use sophisticated tools [to deliver a service] and there’s only one or two suppliers of sophisticated tools, guess what happens? It’s whatever they say that happens. It’s how they think about the problem that everyone will be shoehorned or corralled into, to deliver the answers.”

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