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This article supports a presentation at the Financial Planning Institute of Southern Africa’s conference on 22 April

2010 and provides views on an expected future and the impact thereof on the financial advisor. It suggests an

increasing turbulence yet a time of innovation giving many opportunities. Sound scenario processes will aid to a

competitive edge. The client of the future asks for an empathic approach where financial management principles

to be combined of an in depth understanding of the personality and needs of the clients are key to success.

The Financial Advisor in a Turbulent Future VDS Brink

© 2010 Third Circle Asset Management

INTRODUCTION

We live in turbulent times with a world slowly

emerging from the worst economic decline in 80 years.

It will take years to recover the damage. It is also a time

when a new generation is emerging with a new outlook

on life. These clients with a new mindset pose a

challenge to the financial advisor.

The shadows of 1994 and the impact of the internet

changed all and that current ways of doing things

simply will not work in the future.

This article discusses it and provides guidelines for

coping and using it to create wealth while serving our

clients to cope in an uncertain and difficult future.

Sunter (2001) proposed a simple yet effective method to

look at the future naming it the Foxy Matrix. Simply by

understanding the facts of the day well, Build possible

futures from it, get more information, develop several

options, choose, plan and do.

THE CONTEXT OF WISDOM

Never before more data and information are on our

finger tips. We all have access to about everything and

our minds are swamped by noise and images. Each

person hears and sees about 5000 advertisements every

day.

This does not give a competitive edge as we are all

equal in this. It scatters our minds and we lose our

thinking power.

Modern day fund managers try to convince us of their

offerings by giving and more graphs, numbers and the

same proposals clad in a different clothing.

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The great Warren Buffet lives far from the madding

crowd, reads selectively what really counts and found

that real wisdom beyond it all.

Data – Information - Knowledge – Insight – Wisdom: it

is beyond knowledge where the real competitive edge

lies and our challenge is to pursue insight and wisdom.

Wisdom is found by reading whole books with a logical

golden thread that build the path ways of the mind. It is

found by surrounding us with great people different

from ourselves and by spending time doing things that

spur creativity.

Creativity and solutions are almost never found on the

playing field, but by sitting on the pavilion and having a

faraway look at what happens.

The financial advisor of the future standing out from the

crowd will be the one that practises wisdom building in

every aspect of her/his life.

EXPECTED FUTURE

We live in the shadows of several revolutions.

Revolutions are over and done with quickly, yet the

shadows linger for a long time. In this period we

painfully adapt to the new, while leaving behind the

past with difficulty.

The new South Africa in 1994, the coming of the

Internet and collapse of the world’s financial systems

provide a turbulent future with uncertainty, yet for those

ready for it, great wealth and opportunities.

Some of the current major changes are from Peters

(2005), Aburdene (2007) and Naisbitt (2006):

The Peak Oil period and the demise of almost

all traditional energy sources

creeping socialism worldwide,

the painful rectifying of the worst financial

crisis in 80 years,

global movement of people that will have to go

back home forced by the host countries,

the demise of Europe, the rise of the BRIC

(Russia, India, China and Brazil) countries,

the dehumanization of people due to

technology,

A new war for technical talent,

Social implosions as poor people are rightfully

angry,

the Diaspora of people and the demise of

traditional boundaries,

aging boomers,

the advent of female power,

the rapid swinging of the pendulum in almost

all aspects of society and

the ever widening gap between rich and poor

with South Africa the worst in the world.

SPECIFIC TRENDS

Major technological advances shape the world. The

energy challenges will bring forth innovation as seen

last in 1994 when the world ran dry of oil.

Despite the politically correct hype on alternative

energy, it is difficult to see any major contribution from

solar or wind sources. The electric car will remain a

myth as battery technology never caught up. Despite

general belief, an electric car is environmentally more

unfriendly than a petrol or diesel car with a larger

carbon footprint.

The focus on hydrogen as an alternative fuel and

hydrogen fusion as a radical new way of generating

electricity can be the focus.

Traditional media is and will be under increasing threat

with the onslaught of digital media.

Food production will be aided increasingly by

genetically engineered plants and new commodity wars

will be fought over the access to abundant and clean

water.

Bio technology and Nanno technology will continue to

and can be major focal points for investment.

Locally the current trend in white male

entrepreneurship will continue to surprise.

FUTURE WINNERS

The most important trend is the dehumanization of

people. As herd animals we love to be loved and hate to

be hated. We grasp at technology to solve this need

with Facebook to cure loneliness use and Twitter for

modern day koöperasie stoep stories.

Friedman (2006) proposes that if we can understand all

this and go back to the fundamental needs of humanity,

we can be winners. Those able to do the following will

be the leaders of the future:

work to together with others. To know that I

know so little and surround myself with diverse

people thinking and doing things differently,

put existing things together,

show others how to do things, to help, support

and pass on knowledge and wisdom,

do things differently from the norm,

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apply things differently from others,

care for the earth in all we do,

be a wise giant and focus locally,

an most importantly to put themselves in the

shoes of others

The rapid advent of female power and the more

emphasis on emphatic thinking is crucial for success as

a service provider. The product alone is simply not

good enough anymore. The way it is presented will

count more than anything else.

Key to success is to understand our clients even better

and to spend time understanding human behaviour and

their fears and needs.

THE NEW GENERATION

Generations think and act differently according to

Codrington & Grant-Marshall (2004)

The Boomers born after the 2nd

World War still are the

financial, political and economic power of the world,

yet within the next decade that will fade due to aging.

They are bossy, talkative, stylish and competitive.

The Generation X (1960 – 1980) likes sharing,

individualistic and hates bossiness and corporate

culture.

Millennials (1980 – 2000) loves friendship, technology

and a honest balanced lifestyle.

The market will move away from the Boomers to

eventually the Millennials and increased female power

with a softer more caring approach.

Service providers able to shift towards this approach

will be the winners in the future.

BUILDING YOUR OWN FUTURE

Winning means to understand the future before acting.

Nobody has a crystal ball and tomorrow can bring any

surprise. Disasters happen, things break, bad people are

out to get us, yet great things can and will happen and

those prepared for it will be the ultimate winners.

A sound method is to prepare for 4 futures and be ready

for each one. Sunter (2005)

1. A negative environment and your offering

lagging. Look into the mirror with humility and

ask what went wrong and what should be done.

2. A negative environment, yet your skills are

superb. In this case it is critical to grind away

and keep up your belief in yourself and

personal growth to be ahead of the pack when

the tide turns. Many of us are now in this

situation.

3. A positive environment, yet your abilities are

weak. This is the “Fools paradise” case where

many were during the period 2005 – 2008. Get

on your knees, become humble and start afresh.

4. A positive environment and superb abilities.

This is the 7th Heaven case where we should

reap and sow wisely.

Then map the detail in these four situations Schwartz

(2005 ) proposes that we:

Identify a focal issue to understand and build

wisdom. What decisions do we have to take to

have a long term positive influence on our

future? Avoid the noise of the day; it is just the

swinging of the pendulum. Rather focus on the

longer term trends in society and get ourselves

ready for it.

Some of these were mentioned earlier, yet in a

local community, there might be others more

specific.

List the driving forces that influence your

business directly or indirectly.

Rank these key factors by importance and

uncertainty. Flag the easy ones as they might be

the quick wins.

Post this knowledge into one or more of the

four possibilities above and start working on

plans.

Never stop reading, great answers are often found off

the playing field. Poetry, art, philosophy, history

inspired almost all great people. To stick to journals,

internet snippets retailing to our business is not giving a

competitive edge. Looking at it through the eyes of

other disciplines and sitting at the feet of wise people

are a great step to wisdom.

CREATING OPTIONS

Only now can options for decisions wisely mapped out.

Snap decisions is little different from gambling.

Detailed facts and wisdom discussed with others is the

correct step to prosperity.

Options need to be within the constraints of the law and

must be morally sound.

Morals, values and ethics differ. Our culture,

personality and shaping by society created a different

rule book from other people and a minefield of what is

right and wrong.

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Sound guidelines for the ethical limits of options is

given by Ollinger (2004):

Is it legal?

Do we have a code of ethics in our business?

Do we have a policy to guide us?

Do we infringe on somebody’s rights?

Do we avoid responsibility?

Is it good for our company?

What will they say if everybody knows about

it?

and most importantly; what will my mother say

if she is to know about this?

A quick win serving selfish personal objectives will not

work and should never be an option.

THE NEEDS OF OUR CLIENTS

Our generations differ, our cultures differ,

circumstances and society shaped us to what we are

today. Our personalities differ and so our fears and

needs. To understand your client is the most important

step to be able to stand in her shoes.

McCathy (1999) summarized it that we will have our

clients worshipping us if we understand that they apart

from our product also need:

Do not want to be hurt,

Be part of the group,

worth something,

do worthwhile things,

want to learn,

want beauty & order,

want to share,

want you to care for me,

believe in a higher power,

want to do great things,

angry yet want to forgive,

better than others,

bored and love to laugh and have fun,

afraid of and need to be protected and

reassured.

Focusing on these aspects while proving a service to the

best of our ability are key to success.

Giving our clients a comprehensive solution according

to Demathini (2005) is more important than ever before.

Helping them to be a full happy person is about having

sound relationships, a happy family, a healthy body,

doing sensible work, believing in a higher power and

create wealth.

IN SUMMARY

The financial advisor fulfils a critical role in our

economy to be between an ignorant public and sound

investment principles. As such the profession played a

major role in the growth of our economy.

This role will be even more important in the turbulent

times ahead. Sound understanding of wealth creation,

risk and reward and linking it to the needs and fears of

the clients will be key to success.

For more on asset management and the psychological

profiling of clients go to www.thirdcircle.co.za

For more on the general topic, contact

vds.brink@corvus.co.za of visit www.corvus.co.za

ACKNOWLEDGEMENTS

The Financial Planning Institute of Southern Africa and

specifically Adéle Victor for trust and support.

Hugo Snyman (CEO), Dewald Scholtz (Industrial

psychologist), Thilo Otterpohl (Graphics artist) and

Christo Luus (Economist) of Third Circle Asset

Management for their support, guidance and wisdom so

liberally shared.

Great people sharing and guiding me in the complex

world of wealth management notably Laurette Pretorius

of Sasfin Securities (Pty) Ltd, François du Plessis of

Vega Capital and Vollie Volshenk of Aristaat.

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REFERENCES AND FURTHER READING

Aburdene, P. (2007) Megatrends 2010, Hampton Roads

Branson, R. (2006) Screw it let’s do it, Virgin Books.

Codrington, G and Grant-Marshall, S.(2004) Mind the

Gap!, Penguin.

De Bono, E. (1970) Lateral Thinking, Penguin.

De Bono, E. (1999) New thinking for the new

Millenium, Penguin.

De , E. (1985) Tactics: The art and science of Success,

Fontana.

Demartini, J. (2004) How to make a hell of a profit and

still go to Heaven. Hay House.

Gladwell, M. (2000) The Tipping Point, Abacus.

Gladwell, M (2005) Blink, Little Brown.

Greene, R. (2001) The Art of Seduction, Viking.

Grove, S (1994) The Dance of the Brain, Human and

Rousseau.

Hamel, G and Prahalad, CK. (1994) Competing for the

Future, Harvard Business School

Friedman, T.L. (2006) The World is Flat, Penguin.

Hung, R. Y. (2006) Business Process Management as

Competitive Advantage: a Review and Empirical Study,

Total Quality Management, 17, 1.

Kung, P. And Claus, H. (2007) The fruits of Business

Process Management, Business Process Management

Journal, 13, 4.

Lee, R.G. and Dale, B.G. (1998) Business Process

Management: a review and evaluation, Business

Process Management Journal, 4, 3.

Mccarty, H (1999) Motivating your audience, Allyn and

bacon.

McLeod, F and Thompson, R (2002) Non-stop

creativity and Innovation, McGraw Hill.

Naisbitt, J. (2006) Mindset, Collins.

Ollinger, H (2004) Master’s thesis University of

Pretoria, unpublished

Peters, T. (2003) Re-imagine!, DK.

Peters, T. (2005) Trends, DK.

Schwartz, P. (2005) The art of the Long View, Wiley.

Sunter C, (2001) What it takes to be World Class,

Human & Rousseau.

Sunter C, (2000) Games foxes Play, Human &

Rousseau.

Sunter C, (2005) Socrates and the Fox, Human &

Rousseau.

Tushmann, M.L., (1997) Winning through Innovation,

HBS Press.