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What is ‘Independent Advice’?

An article in the current edition of The Insurance & Investment Journal raises the age-old conundrum of receiving ‘independent advice’. It should be noted that the report is in support of the idea.

Why has this been such a prevailing issue, frequently a hot topic of reportage?

I certainly identify with the question of how independent is the advice one gives. In my twenty-four years in the financial services industry, I was working on behalf of a large organization primarily focused on planning and investments. With respect to the latter, we were offered a platform of in-house investment options, chiefly mutual funds; although for about the last twenty years, third party managed funds have been offered as well.

Thus, while not exactly offering completely independent choices to clients, we were able to cover the range in a reasonable manner, made more so by the company’s emphasis on overall financial planning, and its training sessions for the ongoing development of consultants. Moreover, in this industry, the array of offerings across the board for many years has been so vast, no one could be an expert beyond a limited range of products anyway.

In the article, a different aspect of the issue is discussed, namely, the law of survival perspective affecting insurance companies in Canada. The narrative looks at how best practices ties into what’s best for their distribution networks.

On the one hand, there are independent advisors who want to remain so. “If an insurer offers special conditions to independent advisors to increase sales” – inducing them to funnel their business to only one provider – the impact may “become unfair to other advisors with whom it has business relationships”.

On the other hand, if the insurance company increasingly focuses on its own network of distribution, “it is likely that other insurers will eventually do the same”. If they all start to fold their tents, the wide-open possibilities of interdependence will be replaced by the tunnel vision of intra-dependence.

In other words, it is not only unseemly but also impractical for supposedly independent advice to be allocated from just one hand.

So, can advice in the context of providing a service ever be truly independent?

As suggested by my own experience, and with other service episodes anecdotally, this goal remains aspirational. When I hear or read of spokespeople promoting the independence of their service mantra, I can’t help but feel they are deluding themselves.

No one person or organization has an all-encompassing formula or lock on full independence, at least not in the commercial world. Product knowledge in many service fields, such as relating to personal finances, keeps advancing and expanding. As we all know, technology has quickened the pace; indeed, as pointed out by Tom Friedman in his book, “Thank You for Being Late”, the pace of ‘accelerations’ has reduced internal evolution in much of what affects us to one to two years. As well we must consider the human factors, such as personal expertise, performance, and, let’s face it, ethics.

Thus, truly independent advice giving is a ‘pie in the sky’ concept. That doesn’t mean we can’t enjoy reaching for a piece as much as possible.

 

Being Mindful

It would seem superfluous disputing that the mind is the most important cognitive part of the body; assuming that’s so, being ‘mindful’ should be at least in the highest echelon of good default positions.

What does mindfulness mean? An article in the February edition of Toastmaster magazine gives this a thoughtful (as it were) look.

The author wastes no time in maximizing the scope of mind matters: she uses the example of a familiar cartoon called ‘The Worrier Pose’, which illustrates that we typically juggle a miasma of concerns, to make the point that what may be top of the whirlpool of our mind is – everything!

Engaging in mindfulness helps divert us from self-judgement and other distractions of consciousness. It has been a part of practices such as yoga and Buddhism for centuries. In our times, this subject had come to influence a range of fields, from psychotherapy to sports.

To dissect what mindfulness really encompasses, consider these elements:

  • Focusing on the moment: ‘secular’ mindfulness is considered to mean paying attention, on purpose, to the present moment in a non-judgemental way; in this way one’s senses are tuned in to now; accepting that the mind will wander, meditation can be a valuable way to address this, as an “activity of bringing your mind back when it wanders”, training it to settle on the present
  • Focusing on the mind itself: another perspective sees mindfulness as being aware of our mental states, non-judgementally; adhering to this practice helps one to breed an inner balance along with self-confidence, and moreover one can “more readily access creativity and intuition necessary for publicly communicating a vision and problem-solving”; feelings such as anxiety can be recognized for what they are, minimizing their impact
  • Focusing on colleagues and others in supportive groups and professional organizations: understand and encourage the diversity in others one encounters in these groups, reducing barriers and increasing connection, as well as enhancing our communicative skills in speaking and listening

There are also a few suggestions on to how to ‘cultivate’ mindfulness.

  • Keep some physical distance from one’s cell phone
  • Concentrate on one task at a time (multi-tasking is multi-muddling)
  • Try changing habitual responses, such as using the less dominant hand for tasks usually done with the other
  • Pay attention to all of one’s senses
  • Use the meditative practice of focusing on the centre of the body, which substitutes awareness of the present moment in lieu of attention on thinking

These approaches contribute to enhancing ‘mental strength and clarity’, laudable resources for coping with our fast-paced lifestyle.

A Hurdle is not a Stop Sign

Perhaps all of us, at one time or another, have been tempted to feel discouraged, perhaps quickly, by setbacks on the long journey to accomplishing major goals.

Indeed, if looking at statistics, one can easily be ready to throw in the towel, especially if that towel is frequently coated with rejection.

Many of us are familiar with the 80/20 rule, which anecdotally applies to a wide range of endeavours: (more…)

Adding Value

The proposition of ‘adding value’ has been an underlying foundation for success in service-oriented businesses for many years.

If one wants to generate a positive, lasting and loyal, relationship with customers, providing those extra ingredients of value is vital. This could be indirectly related to business, i.e. taking clients to lunch, paying for tickets to events, etc., or more directly, such as keeping in regular contact, or going the extra mile in solving problems quickly, or obtaining more helpful data for decision making. (more…)

You Know It’s Time to Move On

I have a friend who is being compelled to move from her longstanding residence shortly, due to a very unfortunate set of circumstances. She is quite unhappy, having to give up the apartment, albeit in a creaky old house, given its scenic, multidirectional view, but the environment has become untenable.

One of the constants of life is change – but some changes are much earlier to adapt to than others. (more…)

Charitable Rewards

According to a recent report from the Fraser Institute, using tax data, the percentage of Canadians giving to charities has diminished to about 21% from a level of 25% ten years earlier. It has also gone down as a percentage of income.

Americans compare more favourably on this particular scale, with nearly 25% contributing and at a much higher rate of income than Canadians. (more…)

TOP 10 New Year’s Resolutions for 2018

It may be a new year, but there’s still baggage on the horizon…

  1. Lose weight by trimming your bling or dysfunctional cosmetic implants, whichever is heavier
  2. Get brochures or postcards of travel destinations you would have gone to if they were more affordable
  3. Set up a dart board with images of individuals or businesses which would benefit from getting the point
  4. Post a list of resolutions in declining font size and brightness so the later ones can be overlooked more easily
  5. Use a business card with a chip which allows for it to be remotely dissolved if the cardholder proves unworthy
  6. Invent a new species and become its trusted advisor in bilateral negotiations
  7. Memorize the first and last lines of book chapters so you sound like you are well read
  8. Develop a new social networking site which functions strictly to vote and comment on other social networking sites
  9. Eliminate any references to ‘trumped-up’, since that expression now has an inescapably deflating political connection
  10. Take back-to-back courses on empathy and callousness, then have a point-counterpoint debate with yourself

(more…)