Ep 74: Financial Advice with Soul — A South African Perspective featuring Lelané Bezuidenhout CFP®

Episode 74 of Rethink Financial Advice, co-hosted by Derek Notman, CFP® (Founder & CEO, Couplr AI) and H. Adam Holt, CFP® (Founder & CEO, Asset-Map). (42:01)

Episode 74 of Rethink Financial Advice, co-hosted by Derek Notman, CFP® (Founder & CEO, Couplr AI) and H. Adam Holt, CFP® (Founder & CEO, Asset-Map). Listen on Apple Podcasts, Spotify, YouTube, or Acast.

Episode Summary

Lelane Bezuidenhout joins Adam Holt and Derek Notman to describe how financial advice is developing in South Africa, where she leads the body that awards and maintains the CFP designation. Her most transferable material concerns regulation. South Africa’s Retail Distribution Review issued 55 proposals in 2014, many of which have already become regulation, and the country has been shifting from rules-based oversight toward a principle and conduct-based framework. The piece still unresolved is compensation, and Bezuidenhout argues the field cannot properly claim the word profession until it settles that debate in the open. The hosts pick up a related thread on honesty, noting that advisors tend to perform infallibility out of fear of losing a relationship, when deliberately poking holes in your own recommendations would demonstrate a more credible kind of confidence.

What this episode covers

• How South Africa’s Retail Distribution Review reshaped advice practice from 2014 onward
• Moving from rules-based regulation toward principle and conduct-based oversight
• Why the compensation debate has to be settled before advice can be called a profession
• Choosing the long planning game over the faster transactional one
• Admitting uncertainty and testing your own recommendations in front of a client

Full Transcript

Machine-generated transcript of this episode.

Welcome to Rethink, the financial advisor podcast. My name is Adam Holt. And this is Derek Notman. We are your hosts, both veteran advisors and FinTech CEOs who challenge the status quo, question everything and have fun doing it. Hear honest commentary on the challenges facing advisors today and be part of a community where we can all rethink the profession. Now on to our episode. Derek, is South Africa more evolved in financial advice delivery? Great question. I might be a little biased because of my roots in South Africa. However, I think they’ve got something. I don’t know if you want to call it a leading edge or an idea, but there’s something going on there.

I think they’re actually more forward thinking or open to change and evolution for financial advice than maybe we are in the States. Most of us in the States barely know what an advisor down the street is doing, let alone what someone in another country is doing. And in our journeys, literally around the world now, Derek, you and me, we’re learning a lot about what other people are doing. So what do you do to help grow, whether it’s a company or anything really, is it helps to take the blinders off and look outside what’s working in other places, other regions, other sectors, and so forth. And so, I mean, South Africa’s kind of on the other side of the planet, right?

And so they are doing things differently and it is giving us a unique perspective onto what’s working down there and what are they thinking about and what are they doing? And when you’re talking about advice, the CFP mark obviously comes up. This is something that, it’s just, it’s a world-recognized credential at this point. And so who better than to bring someone on who actually leads all CFPs in South Africa? We had the opportunity to actually speak with Lelani Bezudenhout. She is the CEO of the Financial Planning Institute of South Africa or Southern Africa. In other words, they are the ones that award and maintain the CFP designation for all of South Africa.

And so she’s got one heck of a perspective when it comes to advice delivery and what’s going on. There’s no question. And I think what’s really interesting about her and she had this opportunity to share this is that she started out as an artist and found her way into the space. So again, another example of somebody who didn’t come from a passion for finance and then wound up finding her way as long as I think both of you and I had been in this business. So it’s interesting to see how she’s taken this very unique role and influence. And gosh, she talked about a lot of things I think it’d be really interesting for you all to hear and how this is applicable.

So listen intently how you can actually apply some of this in your own practice. Yeah, I think so. Maybe time to get off the US pedestal for a moment and see like, oh, maybe we don’t have this as figured out as we thought we did. Awesome, you’ll notice that we’re in a different space. This is one of the first times Derek and I did an interview together besides being recently in Nitrogen’s Fearless but we did this at the new AssetMap warehouse. So we hope you enjoy this conversation with Lelani. So Lelani, thank you so much for joining us today. We really appreciate it. Excited to learn more about your perspective and to kick things off, please just give us a better understanding what your unique perspective of the financial advice market is.

Sure, thanks Derek. That is a loaded question. So I thought about this long and hard and for me, the first thing that comes to mind is that the financial advice market itself is misunderstood, not only by consumers but definitely by key participants in the broader financial ecosystem, like your employers, your regulators, definitely your regulators, financial institution and some of the advisors themselves. And why do I say this? I say this because for years the story around financial advice has been dominated by product sales. So financial institution built distribution models is really around selling products and not delivering holistic financial advice. But then it actually goes further, Adam and Derek, if we look at the regulators.

The regulators on the other hand, and I’ve got my fair share of dealing with regulators, as I’ve mentioned at some point in time, I’ve worked at an Ombudsman’s office as well. Now, if we look at the regulators on the other hand, they mostly focus on controlling product-related risks rather than defining and promoting what true professional financial advice should actually look like. And then as a result, it’s no wonder that the public still largely associates financial advisors with product pushers rather than trusted professionals who help them plan their financial lives and purpose. And then maybe in closing my personal perspective, you’ve asked for my personal one on the financial advice market is that we still have a long way to go to ensure that we understand our clients deeply.

And with that, I mean their values, their fears, their goals, but also their family dynamics, which is why I really love the concept you have with assets map, Adam, and then creating strategies in partnership. This is very important with the client to help them navigate through every stage in life. So that’s in a nutshell, my view of the financial advice market. We’ve got a long way to go. That’s really interesting to hear because we tend to stay so much in this idealistic perspective of what the industry is relative to what it could be. And I think there’s some really interesting points and we’re so impressed with what you’ve been able to achieve in the South African marketplace.

In many ways, it has jumped over the US marketplace with respect to the awareness of financial guidance, not necessarily products, but it’s still prolific. That’s where people are making their money. So what do you think is the missing opportunity, Lelani, that advisors are not addressing? What is that opportunity? Well, with the flip side, there’s always opportunity, but then there’s also what we don’t see. There’s opportunity, but then also the risk comes with it. The real opportunity for me is to reframe. We have to reframe professional financial advice as a lifelong service that help people to navigate the entire financial journey from the first paycheck. I’m sure you can remember your first paycheck.

In fact, I threw my cupboards out the other day and I found my very first paycheck. And yeah, we’ve come a long way. So did inflation, by the way, but from your first paycheck to your retirement strategy and also then that generational financial planning that comes in. So that’s where the opportunity lies, is we have to reframe what that looks like. And why do I say this? It’s because we really require advisors to promote their professional financial advice, not the product that they are selling and to become more visible and accessible and transparent. This is very important to be transparent in everything that they do and when they communicate their own personal value.

But if I may also, Adam and Derek, mention on the other side, if you look at the challenges, there’s quite a few challenges that we do not see coming our way. And that is for me that if advisors, and I recall, we had a forum discussion earlier this week with both of you online and I recall you both actually also mentioned it, that if advisors don’t redefine and reposition themselves as lifelong financial influencers on their clients’ lives, someone else will. And who’s that someone else that I talk about? I talk about FinFluencers, I talk about AI platforms, I talk about institutions that’s not even financial providers, but it’s more your education type of wealth advisors.

So yeah, if you don’t influence your client’s life, somebody else will. So that’s maybe in a nutshell what I see on the horizon. I love that. So along those lines then, Lelani, obviously a lot of advisors listen to this podcast and we’re hoping to get more in South Africa, obviously with your participation. What would be like a top one or two action steps you would say to advisors listening right now of the next thing that they should think about trying to do? All right. So I can give you one or two, but there’s a high level four that I’ll really just high levelly summarize for us.

Number one, stop selling products. You have to start selling your own personal value. You have to start selling professional financial advice and you have to position yourself as the professional financial partner in your client’s life and not just somebody who knocks on the door say, hey, look, yeah, I’ve got a whole bouquet of new financial products for you today. Pick one. That’s the first one. And then the second one for me is educate your clients and the community. You have to clearly explain what financial advice is actually all about and why it matters. That’s one of the first discussions that you need to have with your clients or not, hey, I see you need another retirement.

It’s just clearly explaining what it is and then your own visibility. You have to start building a digital presence and that links up with what I’ve said earlier on is if you’re not gonna build that digital presence and people can’t find you, they will find somebody else that can influence them and then collaborate, don’t compete. You have, we, all of us, like the three of us are doing now, we have to work together as a profession to actually raise the public’s awareness and shift the perceptions, the bad perceptions that we have about financial advice. That’s the four high-level ones I can give you, Adam and Derek.

I love it. That resonates so much. I love that you frame it as let’s help each other. There’s enough business for all of us, right? Let’s help each other lift up the profession. Absolutely. In South Africa, Derek and Adam, I’m not sure if you’ve heard of, we talk about Ubuntu and Batapeli and that means you are because we are. So it’s two principles that we love by Ubuntu and Batapeli. Very important principles in our lives. Very cool. Gosh, I think you’ve brought up so much that I’m already ready to start debating, but I think we want to give you the platform to share with us in our community.

What is something that needs to be heard that hasn’t been heard that you haven’t shared with us already? Sure, Adam, there’s a lot of confusion and I found that not just in South Africa, because we work on a global community in terms of the Financial Planning Standards Board and a few affiliates that come together. And I must say, we really work quite well together as the various affiliates of the Financial Planning Standards Board in terms of best practice sharing. And we need to debate and talk more about remuneration models. What does that look like? The fees, the transparency and clients don’t understand what they’re paying for, let’s be honest.

And often advisors, they don’t know how to clearly articulate the values themselves. So if you, as an advisor, cannot confidently explain your value to the client beyond normal product performance, why should a client pay you? And I find that advisors battle to actually articulate that, why should a client pay me? But there’s a lot of debate around remuneration models at this point in time. And I think we need to bring it to the forefront. In South Africa specifically, we have what we call the RDR proposals, which is the Retail Distribution Review. And we had 55 proposals in November 2014 already. And out of that 55, we had a lot of changes that came into regulation already.

In South Africa, we are moving from a rules-based type of legislative environment to a principle-based slash conduct-based. And one of the proposals that was not really bedded down yet is this remuneration model debate that we always have. Is it assets under management? Is it commission? Is it fees? Or is it all three? And how does it work? So I think we need to bring that debate to the forefront if we really want to classify ourselves as a profession. What a great, insightful conversation from the other side of the planet. For sure, for sure. Just an elevated thoughtfulness, certainly from Lelani. I think she really has the opportunity to think about the profession because she sees it in a different light than most advisors.

She really does. And she left us a lot of really good nuggets. I mean, clearly she’s passionate about this. She’s got the great perspective. And it’s just so cool that we’re able to not only chat with her about it, but heck, we’re even gonna be at their conference later this year, which is gonna be pretty exciting. That is true. We’re gonna take the trip. We’re gonna fly over to South Africa and speak with them and meet with our friends there. That’s gonna be a really great experience. So we’re gonna open our eyes about what else is happening in the States. We tend to get a little myopic, I think, talking about the same things, same media outlets and so forth about who’s doing what.

But it’s very true. I mentioned it there before. There is definitely an evolved awareness of delivery of advice over delivery of product, even though a lot of the superstructure in South Africa still has a great amount of product distribution as its monetization strategy. It does, but it feels like it’s shifting faster there than in the States, honestly. We have our inroads, both of our companies do in South Africa. We even talked about this with Kobus and with Becky Temba in our previous episodes, but there’s something going on in South Africa where it feels like there’s a little bit more willingness to speed up the process of change versus here in the States.

And I don’t quite know why, but it’s refreshing, I’ll tell you that. It’s pretty cool. Yeah, look, we could speculate all of it on the regulation. I thought there was some really interesting things because as some of you know or now know that the FBI in South Africa owning the CFP credentials there has a requirement to be both a compliance as well as an ethical standard, as well as lead the charge on what does it mean to be a CFP? What does it mean to be an advisor? And we have seen this in most of the countries. We see this in Australia and New Zealand as well, a higher standard with respect to fiduciary responsibility that I think America has been grappling with for years, not knowing what it’s gonna do to our industry.

What did you think about the size of South Africa as a CFP though? That was interesting too. I thought the size of the CFP mark in South Africa is really exciting. So I think she said they are number six in the world for CFP growth. Now, granted, they don’t have nearly as many CFPs as the USA, but you could call the States an outlier. We’re an anomaly where they’re the sixth in the world. I mean, that’s pretty awesome and it’s growing fast. And they’ve only had access to the CFP market for what? Just over 20 years there. We’re in the States, we’ve had it for what?

40 plus years, something like that. And it goes to some of the other points she’s talking about about let’s get away from product and let’s focus on advice and let’s focus on getting the value out to the community and educating. Yeah, I’m just really encouraged by it to be honest. It’s really, really cool. What it was, it was interesting when she was talking about the regulation focus on product risks. And I couldn’t help but think, where else do we see that? And you know what I thought of, Derek? I thought of our healthcare environment, right? We tend to think of medicine and doctors as being advocates for obviously wellness and fitness and all this other stuff.

But the reality is that the regulation seems to be more around the treatment. It’s the pharmaceutical side, it’s the surgical side, it’s the mistreatment and the malpractice that tends to drive how we deliver medical guidance, just the same. And I wonder whether we can ever really get away from the fact that the dominant way that advisors make money. And the reason, by the way, that private equity companies are flying into buying financial advisory practices is because on the back end, the monetization argument is you can manage the assets and the solutions. So I don’t know if we’re gonna really get away from the fact that people make a lot more money when they can manage a distribution of solution.

Yeah, healthcare’s a good example, although I think it’s maybe shifting a little bit. But at the end of the day, I mean, she mentions too, where’s the money going? Where’s the money flowing? And that’s still the driving factor when she talks about remuneration or fees and compensation at the end of the day. As a doctor, if I’m getting paid X dollars to prescribe prescription X over this other pill, just saying, I mean, that’s what’s out there. And it’s about treating symptoms instead of treating root causes. And this is kind of fun, I’m just realizing this, professional financial advice goes to root cause and helps you deal with it.

Products deal with symptoms. Yeah, no, absolutely. Right, and that’s the problem. We’re in an industry that’s treating symptoms instead of cause. Well, that’s because we get paid on the symptom solution. And we need to flip that, pay on the root. But that’s, it’s a lot easier said than done, let’s face it. Yeah, no, you’re right. Look, I think we all know that worldwide fundamentally. If I want financial guidance, I mean, it’s the same thing as, you go to a new country, you go to someplace where you don’t know any place, you hire a tour guide. And then the tour guide takes you around and, well, I do that.

Or go with a group. I mean, when I’m going- I’m blowing up your theory right in front of you. Well, okay, so, sorry, most other humans go someplace new and they want a trusted tour guide. I don’t know, I guess I’m rare in this argument. You just go, you just move your family there. I think that’s, I’m very jealous of you, of course, scared of that. But the reason I mention is because, typically when I’ve done this, right? And hired a tour guide or gone on a trip. And it’s great. They thought it all out. They say, look over here. Now look right. Now look left.

Now look right. And you see what they want you to see. And then you look back and you find out that they took you to the shop that sells trinkets that they get a kickback on. And they took you to the restaurant that they got a- That’s a great analogy. It’s float fruit too. You didn’t know that, but you saw that experience. You saw that country and you’re like, yeah. You just don’t know the underlying compensation that’s happening that’s motivating the experience you’re actually getting. And so I guess I wonder whether what we really need as consumers is we need guidance and advocacy around on paychecks.

She said it on benefit selection, but advisors don’t get paid for that. And so it’s not surprising that the tour that one experiences, the financial advice guide is gonna be predicated on how the guide is paid and what they’re compensated to do. And the incentive is for them to just, hey, I’m just gonna focus on the pain of asset management. Who cares about all that other stuff? I don’t know. It’s a misnomer, certainly. And I don’t know how to fix it. Whoever does, they’re gonna make a lot of money. Are they? That’s the thing. I don’t know. I don’t know if- If you can fix it in a way where the money still flows and the product distributors are still getting paid, then someone’s gonna do really, really well.

But that’s an if, right? I don’t know if you can fix it. I like that she’s talking about being transparent. Okay, your tour operator thing. At least tell me you’re gonna take me to the trinket shop where you’re getting a cut. At least that way I know when I’m informed. And at the end of the day, do I really care? Maybe, maybe not. I’ll go buy your trinkets, right? Yeah, yeah, yeah. But tell me that so I know that the widget that I just bought that isn’t even made in the country I’m in. Look at this cultural icon made somewhere else, right? Stamped. Listen, we’re all suckers in the moment.

It’s a real good question because we’ve had this conversation with plenty of guests on our podcast here about, how does fee-based financial planning work? You and I both were covering planners. We still all have figured out ways to build successful practices by asset management and of course, placement of protection products. We know that business. We’ve benefited from that system and it’s provided us, I think, and it creates a marginal return on investment that’s really appealing. And I don’t know. I mean, you see this argument, Derek, all the time for pharmaceutical companies. Why does it have to be $2,000 for a dose of the XYZ drug?

Well, because it’s 10 years of research and a billion dollars to actually get here. I can’t argue that, right? We wouldn’t have the drug if you didn’t make that investment. I appreciate you need a return. In the financial advice space, it’s gonna be really hard, I think, to get the distribution companies who have figured out a way to monetize these assets to give up that margin because they’re like, well, I invested, I made it. Now it’s here. You want me to give up my margin? You know, I’m gonna try a different angle on this, too, if you think. Maybe it’s not up to the product distributors at all.

Maybe they’re not the bad guys. Maybe it’s the advisors that are the problem. Okay, why? Okay, so you and I both built successful practices with a planning core focus. But we sold a ton of product, too, didn’t we? We did, yeah. Okay, and the consumers had no problem buying that product. No. But they did it through a planning process. Yeah. So planning takes a long time. Planning is a lot of work. It’s a lot faster for me just to sell a term policy or an annuity and maybe play on your fears as a consumer and just get the business done and then go on to the next one and be much more transactional.

So maybe the shift really needs to be, hey, advisors, stop being a McDonald’s drive-through here. Like, start focusing on the long game instead of the short game. And if you do, now you’re giving your clients what they want, you’re being transparent, and you’ll sell probably actually more products, honestly. You’ll make more money, right? But there’s a delayed gratification now. You’re totally right. And look, the CFP board knew this in 2016. There was an AITE survey that came out back then, I remember it really well. It said that if you had a CFP on staff as a financial services person, you made 48, 50% more revenue.

You’re generating more revenue if you lead with planning for sure because you just solve more problems. You uncover more needs, you grab more wallet share, your lifetime value expands because the client’s gonna stay with you a long time. This is why every single financial services company, bank, credit union is getting into financial advice as a product or as a service because they know they’re gonna just get more of the same money that we just talked about is motivating, right? They’re gonna go to more trinket stores. They’re like, I can get a share on this, and you know what I’m saying? But they’re doing it because of a process that’s transparent and thoughtful, and that’s what the consumer wants.

Even Michael Kitz has said, the money’s gotta land somewhere, but help me land the money at the right trinket shop that I’m happy with. At the right trinket shop, the right restaurant. I monetize the bathrooms, I monetize everything. Yeah, right, seriously, yeah. Well, there’s a lot of places that you actually have to pay to go in the bathroom. I guess you’re right. But if it’s a good process. So I think that’s where we’re coming at. So maybe it’s not product distributors at all. They’re the good guys in this situation. Maybe it’s advisors who, I’ll say it, are too darn lazy to do planning. I guess that’s an interesting corollary because I’m thinking about it in my medical analogy.

So if the pharmaceutical companies, the product, the surgical outlets, even though they’re making a lot of money, they’re not the ones that are gonna change this paradigm. It’s gotta be the doctors. The doctors have to start asking questions that have nothing to do with, let’s say, treatment and or surgery or meds, right? Is the doctor asking about lifestyle? And I think some doctors are really asking about it. I mean, one of the things that kind of concerns me is we do know that there’s financial guidance and behavior that an advisor can help with for which you don’t get paid, like what to do with your paycheck and maybe how to different spending or budget habits.

You can’t monetize that unless you’re charging a fee. And it’s not gonna be the same kind of marginal rate that you’re making from asset management, for sure, but it’s the good stuff you need to do to help them have overall wellbeing. How do we promote that? How do we make it compelling enough for advisors to say, I’m actually gonna be holistic as opposed to myopic and pretend to be holistic? Because the client doesn’t know any different. That’s what I’m saying. The tour guide takes you on a trip. You’re like, I went to Spain, I saw Spain. No, you saw the 2% of Spain that the guy wanted you to see because he’s figured out how to monetize it and you don’t know what you’re doing.

Like, you’re just there. And you may or may not find out at some point, right? And if you do, you’re gonna be pissed and then now you don’t wanna ever go back to that country because like, oh, I don’t- Isn’t that true? People get jaded just like that. Well, it’s so jaded. I don’t, but can you force all advisors to be planners? No. No, this is the problem. I think that’s why there was, there’s only two influencers here, right? Either the people paying for it, the distributors have to change it or the regulators have to change it and you’re not gonna like it, by the way.

Yeah, right. The only other way to get fundamental change is that everybody in the middle has gotta say, no, we fundamentally, idealistically, from a values standpoint recognize that this is where we want to take the country and that takes forever. Like that takes social change. What could be interesting is maybe the product distributors could, this would make them more competitive against each other is like whatever they pay on comp for an annuity, a life policy, whatever, it has to be the same. It’s levelized comp across all companies. And so now I’m focused on how can I increase my margin by reducing my expenses and getting more advisors to sell us because we fit into the advice model better.

We help people do X, Y and Z. It’s not, hey, I’m gonna pay you twice as much a commission to sell our annuity over the next one. Wow, amazing. You mean promote service and ongoing management? What a novel thought. And actually you would build value. I mean, can you imagine actually if every single financial services product was entirely levelized compensation? It’d be pretty cool, but that’s only gonna happen from like a regulatory, like federal ruling. There’s no way and they’re all in such cahoots with the powers that be that that’ll never happen. But I think that that would be a massive positive game changer. We talked about it in the interview we just did with Tony Stoyer, if you remember, that just came out, it’s on YouTube.

I saw it the other night talking about levelized company insurance space, which is such a dominant factor. But we all know that if you came into this business and weren’t provided a salary, you would be skunked, right? You can’t make- But you can do it. Would it be easy? No, but nothing worth doing is gonna be easy. That’s true. I love that tangent. What else did she say that we wanna talk about? I don’t know. I thought that what was really interesting, she threw this mic drop in there. I don’t know if you heard it. And it stuck with me, this idea of being a lifelong influencer.

And it’s hard to build that level of credibility. I’ve been lucky enough, I think you too, to have, I still have 10 households that I talk to. They have my cell phone, they call me, they expect me to be at the annual review. And some of them have been with me for 20 years as an advisor. That’s cool. From the early days when I knew virtually nothing, they’re still with me. And it’s amazing. It’s a testament to relationship capital. You guys know it well. People that trust you and won’t make a decision without you in the room. But being a lifelong influencer is a really interesting thing.

Do you remember the survey we just reviewed from the World Economic Forum? We actually did a presentation of it that 60% of boomers look to an advisor as their biggest influence. But millennials, 60% of millennials said that social media was their influencers on financial decisions. It’s wild. So who are they getting that influence from, right? I think that’s what Alani is saying. You need to reframe that so you can be that influencer. I think she even said, if you aren’t, they’re gonna go get it from somebody else who will. Absolutely. And frankly, there’s so much capability out there with the doom scrolling. You can basically get stuck in, if the algorithms on social figure out that you’re looking for financial guidance, it will be more than you know what to do with, even conflicting opinions.

And by the way, ability to buy it now if you’re so motivated. I think it’s really hard to differentiate today between what is a marketing pitch and what is a social benefit pitch. And I think they all look the same today. In fact, we’re actually creating marketing these days that is influencing people to take the action I want them to take, right? I’m taking them to my trinket store, but I’m telling them, this is the best store in the city. Let’s go there. But also I got an affiliate code with the guy. Yeah, right. Here’s my affiliate code. Please use this. That’s right. Make sure you click on this link, not that link when we go to the store.

Oh my gosh. It’s true. It’s happening everywhere, man. Well, it is. Yeah, and we’ll get to our bits of advice, but it’s definitely tied into how are you influencing your clients? And ultimately, how does that change the perception between advisors and advice and product and all of that kind of stuff? So I guess, to kind of put a pin on some of this, if I’m listening and I’m an advisor, regardless of my location, what are some things that she said that I should probably do today? I think a lot of it has to do with positioning again. I think we have to remind ourselves that our clients don’t know actually what we do until we actually tell them.

I think they have a lot of trust. And so I think that they see the products that we placed as being getting statements of it and cons reminders. I think it’s an opportunity for us to double down on how we sell our value and tell people what we’re doing and what we’ve done for them. That has nothing to do with the products. We have to remind people. We can’t assume that they know so that they can choose to value the advice, not just the solution. Yeah, that’s exactly it. Sell your value through education. You know, let’s combine those two. What are you doing? Tie it back.

I don’t care that this product has this rider. How does this thing help me do X? I told you I want to send my kid to college. How does this product help me do that? Yeah, yeah. And is it working? I think that’s… Yeah, is it working? Great, yeah, yeah. That’s the thing I think a lot of clients don’t really know. We made a decision to do put something in place, but who’s challenging that decision? Willing and humble enough to say, listen, I told you to do this. I recommended it based on our analysis three years ago. It’s not working. I’m making a different recommendation.

I need to cut it and I was wrong. It’s okay. I think that we’ll call it. That’s huge. I think that seeing awareness I think is not happening enough because we always want to look like we’re brilliant in front of our clients so we never make any mistakes because we’re fearful that we might lose the relationship or the business. And I think we need to do that more often and call ourselves out. That is a different level of, I think, confidence that clients would be looking for. I don’t think we do it enough. No, like poke holes in this thing. Why won’t this thing work?

Is it working the way we thought it would? Blah, blah, blah. If not, how do we fix it? And I’ll tell you, being a captive advisor for a while and now being fully independent, I think there’s more freedom to have that conversation as an independent advisor. Interesting. It’s just my gut reaction. Why do you say that? Why do you say that? Because I act like a rebel in my own captive. Yeah, I think if I’m captive, if I’m only selling one company’s products, there’s like this constant need to justify why I’m selling those products versus looking out at the greater market. Like, hey, I’m only going to provide Xanax.

Don’t care if there’s anything else out there. That’s all you’re going to get. Yeah. But hey, I heard about this new thing in Europe and it’s so much better for you. Wow, no, I can’t sell that. So we’re not, it’s bad. It’s just, don’t even think about it, you know? And I think being independent, you don’t care so much. Because I mean, let’s face it, if you’re a captive, your comp is tied to production. Yeah, that’s true. That’s true. But I think that is the rub of everything. We all make a choice as an advisor to affiliate if it’s such with a captive or with a carrier or with something because we believe fundamentally that that is the best in general choice for the client.

We have to believe that. We do. Otherwise, we’re literally lying to ourselves. So we do, but. In a sense, promoting one or two product lines, I think you have to believe it. You have to believe it, but what happens three years in, you’re like, paint man, this thing isn’t working. And you’re having that conversation with yourself or your staff, but are you going to have that conversation with the client because you don’t have a better alternative because you’re captive? But again, this is a choice. That’s why societal change is the hardest thing to get. So we all individually have to decide where our moral fiber lands.

And if we are honest with ourselves and willing to be vulnerable, I guess with our clients, that’s why they’re investing in their relationship currency, I think. They’re believing that we’re on their team. If we learned that basically the decision we made no longer serves them, and I can be honest about that, I’m like, and I’m gonna make a change as a result. What I believed back then is not what I believe today. We have to have that sell side strategy in anything we do finance-wise because if we just stick with things that we already know is wrong, big surprise what the outcome is gonna be.

Yeah, right. I think maybe that’s the awareness and alignment that we need to hope that our community actually has for their clients, which is, I’m gonna see something, I’m gonna say something, even if it’s me who told you to do it, I gotta have the guts and the fortitude to basically fix it. We can’t force advisors to be that way, but I think what’s starting to happen in that report, the World Economic Report you talked about is saying this. Consumers are becoming more and more self-aware, and if they feel something is off, their gut is probably gonna pick up on it, and if they’re like, man, this thing doesn’t feel right, and I kinda asked Adam about it, but he kinda glossed over and just said the company’s amazing and we’ll be okay.

Now I’m thinking maybe I’m gonna go look and like, oh, wow, I found this influencer. I’ve been following this influencer on Instagram for six months. Really like what they have to say. I’m gonna ask them about my problem. Oh, wow, there’s a better solution out there. This is the thing that happens, right? It can happen pretty fast. Oh, totally. Derek, there is a negative review on every single thing on the planet. If you’re looking for a reason why to undo something, or not take action, you can find it. It’s either a troll or it’s basically a legit negative that somebody had and that can be, you’ve seen things like, I’m really curious about whether this advisor is great.

There’s one negative review out of 400 positives. Like, yeah, maybe this is not the right fit. So same thing as with a restaurant or a product on Amazon, right? We will find ways to not make decisions or to undo it. It is so true. There’s no excuse today that isn’t justified and I’ve got a reason for it, but I think the same time, one of the bigger challenges that we’ve had in financial services and Lana basically pointed this out, is you got so much choice today. There’s almost overwhelming choice that it’s paralyzing and I think the key for us is to focus on education, right?

And that is to show that we’re not only aware of their choices, but we’re gonna educate them how to make a better decision when we’re not in the room. And I think those are the areas where we can also double down for our community. Well, and that’s how she’s like collaborate to lift up the profession and build a digital presence as part of that. You can collaborate with others to do that and help start to influence your clients as a lifelong influence. So there’s ways that they can do that. And I love her last kind of saying was umbuntu and acabele. I think if I’m saying that correctly, acabele.

Sorry if I mispronounced that, but I am because we are and I love that. It’s a strong community statement. And I think we can learn a lot about that. And I guess it depends. Are you thinking about just yourself or are you thinking about others? I don’t know. I think that the commentary on that phrase, what do you think though that means if a society actually believes that? Do you need regulator? Do you need a distributor to motivate you to take action if you believe I am because we are? In a perfect world, no. The regulators would not be necessary, but we don’t live in one of those.

Didn’t we start to ask this question what’s happening that’s different in South Africa than let’s say the rest of the world with respect to this. Maybe it’s this thing right here. Yes, is it possible they have a countrywide standard underlying care for each other that is motivating them to take proactive action as an advocate as opposed to having to be drug there with a regulatory action? I suspect you’re onto something that’s interesting because that is in stark contrast all the stuff you see in the media right now about how bad South Africa is. Yeah. Right, but that’s not what we heard in this conversation or with Becky or with Cobus.

No, that’s not. I’ve been countless times there and my mom is from there. Yes, South Africa has its problems, I’ll tell you. But I’m not feeling what the news is saying either. Well, certainly not with respect to this topic of financial advice. Not at all. The key is, is that right? Everyone is someplace in their journey. What’s interesting to see is how advanced the mindset is in South Africa with respect to the care that’s provided from financial services even when they’re captive. And the interesting thing is that a great number of the financial advisors in South Africa are affiliated with a large organization. And they do amazing work.

I mean, Cobus is affiliated and the guy is brilliant and people love him and he’s been doing it. I mean, we’re onto something there. I don’t know if I can sum it up other than those two words that she said but there’s something to that. I’m glad you mentioned that. I’m part of a bigger team. I’m part of a greater purpose. I am because we’re on the same team despite all the divisiveness that we tend to hear about all the time in South, right? On this side of the pond, we tend to hear that, right? You just mentioned it. At the same time, how can you have a principle like this that is overarching?

It’s almost like having a corporate mission, right? Like these are our values. Despite all our mess, our family’s messy but this is what we stand for. And how is that actually helping deliver a better financial guide? Huh, interesting. Could see why she’s head of that organization. 100%, yeah, it makes total sense. They’ve got the right person at the helm for sure. Very cool, awesome. Well, that’s a great place to wrap up, I think. People gotta be thinking to themselves, what can I do to have a culture, not maybe at a whole societal level but maybe in my practice level that aligns our values that what’s in it for you is what’s in it for me.

And that’s a really interesting framework. I really encourage you all listening to think about do I have an entire advice mission that I can communicate and I can replicate throughout all my clients. Very interesting. Yeah, I love it, I love it. What a great conversation. All right, well, I think we’ll leave it. I mean, people are probably sleeping at this point. So. They may. Or daydreaming. It could be daydreaming. Or daydreaming, yeah. Coming up with their vision. Yeah, yeah. Very cool. That’s good stuff. Well, thank you, Lalani, for an amazing conversation. Really appreciate it and just excited to be with you later this year and Adam, good seeing you as always, brother.

Of course, thanks so much, everybody. Thank you for listening to Rethink, the financial advisor podcast with Holt and Notman. Be sure to subscribe now and join the ongoing conversation. The information covered and posted represents the views and opinions of the guest and does not necessarily represent the views or opinions of AssetMap or Connector. The content has been made available for informational and educational purposes only.