Balderdash from the world of sales

To start the new year, I thought I would introduce an occasional series where I seek to throw some cold water on the more overheated sales gurus.

I use the word "guru" advisedly.     Why do so many people place themselves as a life coach?  Is it because they're the best at being alive?    What is this madness?

I could have called it many things but instead I thought I should just call it "balderdash"., I offer you this link as an introduction to the kind of thing I am on about.  

Whenever there's a list of things to improve your life, you can bet that something vapid and perfunctory is coming.   This is a classic example.  If you do these nine things every day, you can be happier!   

One suggestion is to say these words if a politics or religious argument starts at work -  "Thinking about that stuff makes my head hurt.".    My advice would be to join in if you think you have something to add, or say "I don't know"' if you don't know.     I think advising people not to have opinions, or telling them to pretend to be thick is rubbish  advice.  

Or to give a beggar some loose change because the peace of mind is "worth" the spare change.

No it isn't.   Peace of mind, like good manners, doesn't "cost" anything.   Just do it to be nice - if you want to.  

The image accompanying the piece is of a young woman walking into a waist-high wheat field.   Is this the action of a well-rounded, happy person?    If she has seen Hitchcock's North by Northwest, she'd better get out of there quick.    

Financial Elf and Safety at work

Yesterday I received a phone call from a seasonal worker about where he stands on KiwiSaver, clothing allowances, tax and ACC cover.  Apparently, he asked his employer - who just laughed ("Ho! Ho! Ho!")  and told him to get back to work! 

I sensed from his high-pitched North Pole accent that he works outside of New Zealand.  So there's not a great deal I can do, other than refer him to a local Åutörised Fïnancïal Ådvïser, ensuring that he checks his Disclausure Document before agreeing to anything. 

According to the cyber-stats there are several dozen highly intelligent people now reading this blog regularly.  So if you are one of those - thank you!    There will be plenty more as I get the new enterprise going properly.

In the meantime, Merry Christmas!


  

 

Not the End of the World

Apparently the world is ending today but that doesn't stop MPs getting it in the neck in the press.

But as it's Christmas (if we make it past  Armageddon), I find I do encounter an impressive MP every now and then.     I think it's a bit lazy to have a go at them all the time - no matter how enjoyable that is.   

Several years ago, Chris Carter was in front of me in a queue for a domestic flight.   A lady nudged him and said hello (he was quite high profile at the time).   Carter said some polite, generic greeting back to her.    A small silence followed.

"I've met you before, actually"  said the lady.

Carter looked back at her  - " It's Jean, isn't it?   We met at the Freemans Bay Primary School Gala in April last year."   He then talked in some detail about Jean and what they had discussed back then.

That sort of thing is very impressive and he had a friend-for-life in Jean after that.

Another impressive MP was Scottish MP Donald Dewar.    Before coming to NZ in 1999, I worked in London for 12 years or so.    In 1993,  I was at a conference discussing UK pensions policy.   Dewar was Social Security shadow minister in those pre-Tony Blair years.   He was there to tell us what Labour would do if they got into power at the next election.

I wasn't expecting much - he was a bit late, a little flustered and weatherbeaten.  To look at, he was unremarkable.   Besides,  Labour had no chance winning the next election - no way. 

The subject matter was as grey as his temple hair, but I noticed that - unlike the other speakers - he was talking off-the-cuff and winging it.     He spoke articulately, confidently and in a structured way.   

He knew his subject matter so well that he backed himself to be able to answer any questions at all.    It was a rare mixture of confidence, sincerity and humour that was very engaging.   

He had about 40 minutes and spent no more than 15 minutes on his speech.    The rest of the time was used up talking with the audience, sometimes walking among them, answering questions and having concise but valuable conversations.  No rehearsed answers.   He had an ask-me-anything-at-all demeanour.   

His 40 minutes contribution garnered him a warm standing ovation as he left the room, through the centre aisle, to get to the House.     He was about to do great things for Scotland in the following years, but Donald Dewar was taken from us far too soon, dying in 2000.

Since then, I have witnessed many MPs appearing at conferences and the like.  Typically, they allow about 5 minutes for questions at the end of their (long) speech.    The questions when they come are answered at length and with very careful language.    Often a PA is hovering nearby giving urgent "wind-it-up" signals.    Some answers are even "parked" (eh?) or taken "off-line"  (huh?).    They really can't get out of there quick enough.   

So my message to MPs is to lighten up when you make a speech and meet people and answer questions.   In the flesh, people want to be impressed by you.   John Key is pretty good at this - the downside for him is that he sometimes blurts out the wrong words and he gets a mauling for it in the press.    But that's hardly the end of the world, is it?
 
   




  

KiwiSaver Providers Get Over-Excited

Financial Hazards are everywhere.   Unfortunately, over the last few years, we have seen that some of the most hazardous behaviour has come from financial product providers themselves.    It is true to say that the finance companies and some fund managers simply got too greedy.

In the main, KiwiSaver providers have not had that problem.   However, they are now sitting on about $13bn of the public's money.    In a few years, that should increase dramatically, particularly if compulsory KiwiSaver membership happens.

This is big money and these are big numbers.   Now that this is happening,  % point tweaks upwards in terms of fees could mean millions in extra revenue for a provider.    That's how big the numbers are.

So I get the feeling that there are providers beginning to get over-excited, suggesting more sophisticated (and expensive) ways to save in KiwiSaver, in the form of "life-cycle" or "life stages" funds. 

Nothing wrong with that. If the member wants to do it and agrees that it's sensible - then they should go for it.

Where I have an issue is the suggestion that a workplace enrollers should go straight into these funds as part the automatic process.


Automatic enrollers haven't signed any forms.  They haven't given permission to providers to take risks with their money.    My view is that providers should keep this money safe until the member is ready to take an informed decision themselves.  

If the providers want more people in the more sophisticated and expensive funds, then they make a compelling case to the public and convince them.    

KiwiSaver can make Economic media interesting again

Yesterday, my ears glazed over.    I was using my eyes for driving - so the glazing transferred to the ears.   The words being said on the radio became background noise - a low drone, almost like Gregorian chanting, but without the tunes.

Why?  Well, an economic commentator had a five minute segment on the radio.    He spoke at length about the share price movement of a particular stock.  When he had finished, he started talking about the share prices of other companies - one by one.  


This happens most days.   I think the financial media should consider reporting information that is relevant to the people watching.     Economic commentary in the media still sounds like Collaterlie Sisters.   

I should find the share price data interesting, but I find that I don't.    A share price moving "up 3" is not meaningful because I don't know the starting point or the context of the figure.  

The stories are interesting but when the numbers come in, I am back into a zen-like state.

I don't know many people actively trade in share markets.  So who is this information for?    And if they do trade,  I am sure they will have price data scrolling on their whatever-they-use.  Would they really rush to media outlets like TV or radio to get information?    

So let's give people economic information that's relevant to the audience.

Over 2 million people, roughly half of the NZ population are now in KiwiSaver.    That's half the country with a long-term savings account.    Is it beyond our ken to have an update of the Cash, Conservative, Balanced and Growth funds performances across all the providers?    Most of them declare a unit price every day.

That way, people can see the volatility of the Growth funds, and the relative stability of the Cash and Conservative funds.   And the in-betweenness of the Balanced funds.     Every now and then a provider can pop in to say what they're up to.

KiwiSaver information is more meaningful, more interesting and more relevant to the New Zealand public than share prices.  

Next year, KiwiSaver reporting will be more transparent and unified.   This means that more meaningful comparisons can be made between providers.    A great chance to get this information out there, every day.   So how about it, Fairfax, TVNZ, CanWest ?

Stop Selling at Me!

Financial hazards are rife in retail New Zealand, especially at Christmas.

I sometimes hate going to shops because I find the whole sales culture of some outlets quite tedious.   For significant  purchases, I tend to know what I want - and most of the time just want to go in and get it. 

I actually used to think that I was doing the staff favour by doing this - but I am actually breaking a sales assistants' heart.   

This is because the sales assistants have targets and they are incentivised to sell.   Many outlets do not credit the assistant with a sale unless there is selling conversation of some sort, or they have arranged finance for you.  It's how they get paid.
This is why my straightforward transactions get complicated.   I talk to a very motivated sales assistant, and I get taken off into several directions, depending on what incentives the assistant is on this week.   I have left shops before, theatrically putting the item I was about to buy back on the shelf - due to these methods.  Stop selling at me!
 
Such sales incentive systems drive me mad because they focus on the business first and the customer second.  Very effective when done well - but clumsy and sleazy when done badly (which is most of the time).   Being talked into something that you didn't want or need is a financial hazard - particularly when you end up putting it on credit.

But this is not the sales assistant's fault.   For many, it's not their first career choice and in that context it must be a bit soul-destroying to be actively avoided so frequently by customers like me.  

So this Christmas,  if you are about to buy something and you are approached half-heartedly by someone asking if you want help, don't brush them away - give them the fright of their lives by saying an emphatic yes! 

Even if your sales assistant just shrugs, let them feel that they have sealed the deal.  "OK, you've talked me into it...".   They can claim a sale!  You were going to buy it anyway, and the price is the same - so why not spread some Christmas cheer?     

Grab Grab the Hammock*

Today I have been mostly looking at the creation of my brochures and flyers for my new enterprise.

Although I contend that my business idea is ground-breaking, unique and superb, I am aware that I am in the financial services sector.   That means my promotional material seemingly needs to have someone contentedly swinging on a hammock, ideally with the brim of a straw hat obscuring most of the face (but you can see that the person is smiling).

I looked at the collateral of 10 leading financial services providers and 4 of them had a hammock  in there.  So if I want to be truly independent, I need to avoid the hammock imagery because everyone's at it.

In a way, it's an odd image to portray.  The person in the photo might be homeless and drunk, with just a hammock and a straw hat to his name, for all I know.      


This shows that the Financial Services industry is very conservative sector.

I will concede that it is difficult to convey something abstract like financial health and safety at work with images - but I am going to give it a try without hammocks, deckchairs, sunsets or beach scenes.

*Which 80s pop band am I referencing here?  - if you know the answer, leave a comment and I will send you a prize.

Friends without benefits

As another financial adviser is jailed today, it is another example of how friendships can be established very easily and when untrustworthy people are blessed with that kind of talent, they can cause harm.

The victims are often portrayed as bewildered and docile, like elderly golden retrievers.   This panders to our own innate vanity that we (that is me and you) are not like that.   We're much more savvy  - aren't we?


Good sales people will tease, prod and fish for a personal connection through open questions and compliments about your clothing, your kids, your job, the weather, the All Blacks - you name it.    If some form of personal connection is made, you are far more likely to buy.   All of which is pretty harmless.

It gets dangerous when that talent is ramped up to the next level.   Mere salesmanship then veers into deeply personal areas.   Like a Coronation Street baddie, they connect with the recently bereaved or establish a friendship at a particularly vulnerable time.   Others will hang around church and use faith and spirituality to establish a bond that no mere mortal can put asunder (or something).

Literally anyone can be taken in when someone strikes a chord, establishes a rapport and presses the right buttons.    We move to another league if they make us laugh or we actually fall in love with them.   Even if this was an Authorised Financial Adviser and his Disclosure Document said "I cannot be trusted!  Run away!" - it may well be far too late by then.

These people are so good that even when they are behind bars - some of their victims will wish them well and maintain that the criminal is a good person.   This form of Stockholm Syndrome  kicks in purely because no-one likes to have their heart broken.   

My practical advice would be to make a an agreement, or even a pact, with your best (real) friend.  Talk about these cases.     Promise to be brutally honest when you think there's someone creepy hanging around.   It is very, very, hard for the victim to judge this on their own behalf.   Some of these crooks will work on a "prospect" for many months and sidle into the social circle by stealth.  

By talking about it now you can help keep yourself, and your real friends, aware.   And increasing awareness helps keep you safe.           

Financial Health and Safety at Work - Beware of the Dave!

I have visited many places of work and it is very common to wear some form of protective clothing.  A hi-viz vest, a hardhat, a gown, a facemask, hairnet, goggles - you name it.   It is also important to know which areas are out-of-bounds and to know what to do in an emergency.

Good employers have got this nailed.   They do not see health and safety at work as "political correctness gone mad".   It's important because the safety of their people is important - and they know what can happen if these things are ignored.
 
I say this because many employers have spoken to me over the years about the concerns they have over the financial health and safety of their people.  They see the messy consequences of dumb debt and investments that are far too risky.

The employers that operate their own workplace schemes demonstrate that this is not a theoretical concern.    They are fronting real money, invested for the benefit of their employees.  They want to do the right thing.

My view is that the people that make people do silly things with money are many and multi-facted.   My belief is that many of them walk amongst us - often at work.  
 

A few years ago, I was with a group of people at a workplace talking about how the employer's super scheme works.   A man sat at the back, arms folded, shaking his head at most of my pearls of wisdom.   I will call him "Dave".

Dave revealed that he didn't want a bar of anything the employer had to offer because he could manage his own money - and with much more success!    He promised to share with the group where he invests his money - after I had gone.  

The employer's scheme doubled the employee's contribution dollar-for-dollar, so I asked Dave  afterwards (in a very friendly way) what he was doing that could possibly beat the employer's scheme?   Dave laughed and tapped his nose. 

Now, I will never know what Dave said to the others in the group.     I do know that he was likeable, confident, persuasive and popular.    If he was giving financial advice to them - that would (now) be against the law. 

Given some of Dave's comments, I sensed that he was a big fan of the then-booming finance company sector.   Dave's colleagues were likely to trust him because they knew him.  But Dave wasn't a professional in any financial discipline and he obviously didn't think that investment risk was important. 

Unfortunately, Dave may have been very bad for his colleagues' financial health. 

People like Dave don't only work with us.  They are in our families and amongst our friends. 

Good information about financial health and safety at work needs to come from a professional in the field.   In this case, an Authorised Financial Adviser.    If you're an employer - insist on it.

Respect

My first approach for my enterprise - when I get going next year - will be to employers.

Employers are the forgotten heroes of KiwiSaver.    Lest we forget, back in 2007 they were given 6 weeks to get their heads around it.   And for the most part, they did.   
  
Workplaces are where many KiwiSaver members spend their days.

I enjoy seeing people at group sessions in the workplace.   They are in their own environment and can talk openly and honestly in a relaxed way.   

Unless they themselves approach a provider, no-one really talks to them about KiwiSaver.   

These visits reveal to me how many people show no interest in things like KiwiSaver.   Some call them financially illiterate, or some such other disrespectful term.  I don't agree with that.

Before we really let rip with audible tuts over people's lack of engagement - we must consider of all the things that people do for a living and how skilful they are!    When I have visited workplaces I have been extremely heartened to see how much care is taken over things that most of us take for granted. 

I was once at a hospital, presenting to Senior Medical Officers.   Halfway through, someone in full scrubs, with gloved hands raised in that "I'm-about-to-perform-surgery" stance, came into the room.  

He asked a very quick and basic question because he was due in theatre.   I answered the question and he nodded his head, thanked me,  and said (good-naturedly) that he found the subject incredibly boring.  

We have a moral responsibility not to let people down because, one way or another, they are trusting us.    


To get more people to trust us, we need to make an effort to show them respect.   Otherwise, we sound like the bad teacher who blames the pupils.

Welcome to Truly Independent Financial Advice

I have set up a company called Truly Independent Financial Advice NZ Limited, or TIFANZ.  

It will start operating on 4 July 2013. 

Truly independent financial advice is not made available to the public here in New Zealand.  

I think that has to change.

Why?  To put it bluntly...too many Kiwis are being burnt, scammed, ripped off, shafted and fleeced.
  

In the last decade, I feel like I have been a witness to multiple disasters in slow motion where hundreds of thousands of people lost billions of dollars.    

I was watching, from the other side of the road - unable to help or do anything.   

I have always worked for good, trustworthy employers in the financial services industry but I couldn't speak out because:

a) I wasn't allowed, and
b) No-one would have believed me, anyway

The most vulnerable people are those who are in jobs where they don't have to be financially "savvy".

That's why I speak to groups of people at the workplace.
 
Truly Independent Financial Advice at the Workplace

Half of all KiwiSaver members joined at the workplace yet hardly anyone speaks to them!    These are also the people that come across financial hazards every day.

I talk about financial health and safety.   And raise awareness about what the employer provides, including how KiwiSaver works. 

I don't sell products and I don't pressurise people.  I am not paid commission. 

I earn money by the employer agreeing to pay me for my sessions.

I offer practical information and advice based on 30 years of working in the financial services industry.  I have presented at workplaces (literally) hundreds of times.

I am a fully qualified Authorised Financial Adviser.    I want to make a difference, while I am still young enough to do so, by offering affordable, engaging and truly independent financial advice.  

No, really.

TIFANZ opens on 4 July 2013. 

Let me know what you think.  Feedback is welcome.

All the very best

Austin