Paul Tynan

The mere mention of the words ‘sales’, ‘selling’ or ‘salesperson’ in financial services and it immediately generates a vision of a negative stereotype from a bygone era where a pushy, commission focussed, fast talker enticed unsuspecting consumers into buying products or services said Financial Service Brokers (Connect) CEO Paul Tynan.

Like many things in life, the reality is far different from the perception and one only has look at the majority of long term financial advisers that are still in the industry today providing exemplary service for their clients.  At the same time, they are mentoring the next generation by passing on those invaluable interpersonal skills required to engage effectively with consumers in the FoFA era.

“Although the words ‘sales’ and ‘salespeople’ are no longer fashionable and referred to negatively in financial service circles, they still exist in reality as there is no function or activity in life that doesn’t require selling of some kind”, said Paul Tynan.

“For example, you sell yourself to clients, prospective clients, business partners, friends, etc.  Furthermore, you sell your knowledge, experience, qualifications, advice and communication skills – and the list goes on”.

According to Tynan, this does not however stop financial commentators warning the world to move away from sales and focus on advice which serves the clients best interest.  However, regardless of the diminished regard for the sales function, it is still a fundamental aspect of everyday life and a skill that requires years to master.

“Too many people are focused on the end solution – which in the majority of cases involves a ‘product’.  The sales and product nexus is a part of life – we would all be better off when the hang-ups of ‘selling’ are left in the theory books. Selling is a part of life”, affirmed Paul Tynan.

The true art of salesmanship is not in trying to sell a product or service, but seeks to solve an underlying issue or problem.  The modern sophisticated consumer doesn’t want someone rattling off features and benefits in a robotic monotone.

They need someone to ask questions, probe, challenge and then assist them to identify the problem and discover a solution they’re comfortable with.

Far from disappearing into the pages of history, salespeople are actually evolving and needed more than ever before.  Good and great salespeople throughout the years have tended to share a common trait…they sincerely care about their clients and the people with whom they do business.

As an example, recently Tynan was conducting a succession planning meeting with a four partner accounting firm and asked if the business firm had a buy/sell agreement and the answer was yes.  He then went on to ask what level of funding they had in place and they all sat there stony-faced.

He then asked if they had any insurance in place to fund the buy/sell agreement and their answer was ‘no we don’t deal in product’.  Insurance is not product ‘flogging’ – it is the solution after professional advice is given.

Paul Tynan concluded, “The biggest criticism I receive about new entrants to the industry (and the primary reason why so many fail and exit) is their lack of soft skills, inability to network and prospect and deficiency at finding clients and establishing referrals.

“Look at the world’s top entrepreneurs – they are the number one sales person for their business selling their vision; Jobs, Gates, Buffett, Branson, Ellison, Forest, Symond and Zuckerberg.  First and foremost they are all great salespeople – who said selling was dead”.

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Paul Tynan

As the grandfathering issue steadily tracks towards a resolution that will satisfy most parties, Financial Service Brokers (Connect) CEO Paul Tynan says that although grateful his call for a balanced industry centric approach and outcome to the debate has been heeded, it has been the Adviser that has suffered the most during the recent stalemate.

Earlier this month, Tynan said that everyone has endorsed the new world of FoFA and the intended outcome of a fee transparent client focused infrastructure with a professional industry delivering advice.

However, he felt that the primary cause of the problems and complaints directed towards FoFA came down an overabundance of self interest groups lobbying intensely to ensure that the interests of their particular sector, company or association had priority.

Through the finger pointing blame game, one side effect that has been lost in the grandfathering stalemate and debate by many parties has been the personal hardship endured by the Adviser.

Tynan asks the industry to pause for a minute and consider the Financial Adviser that needs to exit the industry and sell his business for a potential myriad of reasons that may include retirement, illness, death, divorce, and the list goes on.

How do these business owners realize a financial outcome that acknowledges and compensates them for the personal endeavour and lifetime of hard work that they have devoted to their financial services practice?

Financial Advisers have marketed a product with embedded commission because that was the only product that was available that satisfied the consumers’ needs at that time.

Tynan asks the industry to further consider a situation if an employee worked under certain laws and framework to accumulate a capital amount and then through a change of legislation lost all his / her entitlements – who would be complaining then?

In his proposed solution to bring the FoFA debate to a satisfactory conclusion and enhance the legislation so it is unmistakably transparent for all consumers, Tynan advocates that advice should simply be either aligned or non-aligned.

Aligned advice is where the adviser is in a salaried position and licensed via a bank, industry fund etc.  There is a restriction of ownership of client and buyer of last resort (BOLR) terms in place.

Non-aligned advice is where the adviser is a self-employed business owner and there is no restriction with respect to client ownership and if the adviser wishes to leave a licensee the clients are clearly transferable.

Tynan has observed with interest that the big end of town i.e. Industry Super Australia and large institutions / banks are in the same camp, supporting aligned general advice.

“Why don’t we have aligned legislation for non-independent advice and non-aligned legislation for independent advice (personal advice) and work together to ensure that the Australian advice profession is the world’s best – is it really that hard?” asks Paul Tynan.

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Owners facing uncertainty in selling practices or transferring licences.

Industry predictions of large scale exit by financial planning business owners leaving the sector have not materialised as principals find themselves in a holding pattern preferring to defer their exit plans until there is more certainty around the final version of the FoFA legislation said Connect Financial Services Brokers (Connect) CEO Paul Tynan.

Tynan has observed that practice owners would prefer to get on with their lives but find themselves, unable to sell or transfer their businesses to potential new owners.

Compounding the situation for those sellers in search of an exit now has been the number of buyers becoming fussier and seeking greater value when it comes to buying or investing in a financial service business.

Connect can certainly attest to this situation as at present the Melbourne headquartered consultancy has far more buyers than sellers on its books. “One of the main stumbling blocks is the current state of the market as post FoFA concerns escalates and this is reflected in numerous transactions being placed on hold until ASIC sorts out the legal restrictions, in particular, the loss of grandfathering if a practice is transferred between different licensees”, said Paul Tynan.

“It is ironical that as business owners, they have worked diligently providing succession advice to clients and now those that are seeking to retire or implement a succession plan find themselves facing an unprecedented period of uncertainty”.

A further significant challenge for the industry is the looming exit of the Baby Boomers as they seek to leave the sector and retire. Tynan added, “The Australian financial service sector is about to encounter a huge transition of business ownership and as an industry all stakeholders need to explore and implement new and innovative strategies to accommodate the transfer of these businesses to the next generation”.

However, once this period has passed, Tynan is confident that the post FoFA era will be one of greater certainty for practice owners and planners and the industry acknowledged and recognized as a truly professional service.

“Post-FoFA will see planners focusing on delivering quality advice in a new transparent world of fee for service and being able to articulate and document what they are delivering to their clients”.

“Consumers of the future will benefit immensely from the services of high quality financial planning practices that operate client centric businesses that focus on delivering quality sophisticated advice services to their clients,” concluded Paul Tynan.

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