As the first Model T automobiles rolled off Ford’s Detroit production line in 1908, owner and famous champion of consumerism, Henry Ford was reported to have said that “people can have any colour they like, so long as it’s black”.
In some ways this slightly dictatorial instruction is relevant for those who provide financial advice because, despite it now often being perceived as a sign of Ford’s intention to offer less choice, he was in fact introducing a previously high-end product to the mass market – quite the reverse of the modern perception.
What relevance does this have to financial advice? Because by sticking to the basics and giving clients what they need (and doing it well) you will ultimately be providing them with the best service.
Allowing clients to be led by market forces or the gossip they have heard on the golf course, and therefore giving them what they want, will not be why they thank you.
What they will inevitably thank you for is ensuring that they have financial products in place which help them, like having protection when faced by one of life’s common, some¬times tragic, obstacles. This is the school of thought which saw Andrew Cole launch Prosperity in the United Arab Emirates in 2009.
Cole has long subscribed to the theory that in order to provide someone with what they need, you sometimes need to go against what they wish for – a lesson learned, aged 16, while he was growing up in the UK’s West Country.
Early start
“When I first started earning a bit of money, my mum said to me ‘you have got to take out one of these Prudential policies’ and, despite my protestations, I did,” says Cole. “When I was 22 I cashed it in – if it wasn’t for my mum making me take out that policy, I would have just spent the money and had nothing to show for it.”
Fast-forward to 2013 and Cole is at the helm of a self-started advisory company in the UAE which has offices in Abu Dhabi and Dubai, and a staff of 38, which includes 25 advisers, five managers and an eight-strong team of back office support.
Enviable growth
When considered in the context of the years over which this has taken place, Prosperity’s growth is, if not necessarily remarkable, certainly enviable. The UAE may not have quite felt the full brunt of the financial crisis, one which continues to envelop the Western world, but it has sustained its fair share of shocks – the near-collapse of Dubai World and the subsequent nosedive of the property market to name but two.
Rewarding success
Part of the strategy employed by Cole to grow the business sustainably over this period was to ensure he got the most from his employees – explaining that, according to his own estimation – “at least 50% of staff in most brokerages in the UAE underperform”.
“I didn’t want to carry dead wood,” says Cole. “Many of the local brokerages have large swathes of their people non-performing. I wanted a brokerage which was big, but productive, with good, experienced consultants.”
In order to maintain a productive team, Cole admits he has to be ruthless at times, seeking his inspiration from another famed American businessman, former General Electric chief executive Jack Welch who claimed in his 2005 book ‘Winning’ to have always sacked the 15% worst performing managers and promoted the top 10%.
It should be noted though that Cole does give his advisers an opportunity to improve and will invest time in those who are underperforming until it is no longer realistic for them to continue in Prosperity’s employment.
Cole explains that the business he is building aims to target not just the Western expatriate market but also some of the other more prevalent nationalities in the UAE. This naturally includes local Emiratis, which Cole says make up around 7% of his client base, but also encompasses Filipino nationals, who make up 25% of his clients, Indians who make up 11% and North Americans who make up 7%. British expatriates still represent almost half of his client base though, with Cole estimating about 40% fall into this category.
In order to capitalise on this mix in his client base, Cole has hired people from each of these nationalities and tasked his five managers with building a team of advisers geared towards serving clients from their respective nationalities.
Tough tech
Another key component of Cole’s strategy was to put solid IT systems in place, something he says took the best part of two years to perfect.
“It has been tough for me,” says Cole. “I have had to change systems a number of times to ensure we stayed afloat.
“As a sales manager in an organisation, you don’t really see the back office, how it operates and the issues it can throw up, so it has been a massive learning curve for me as sales is really my background – I was perhaps a little too trusting to begin with.”
Cole believes that it was vital these systems were in place before the company began to grow too much, as it is an element which, if not done correctly, has the potential to put an organisation under water.
Technology and the benefits it can provide to both advisers and the end client continues to be a hot topic in financial services, with some advocating greater consumer control of their wealth through its use.
However, Cole suggests that offering full and easy access to their wealth may not always be in the client’s best interest and from an adviser’s perspective can take away opportunities for them to engage with clients on products they need, such as protection.
Keeping it personal
“We have been crying out for more IT availability for customers, as things like switching funds or changing addresses should be done online,” he says.
“But you also have to think about the opportunity to sell.
“If everything is done online then the agent has no interaction with the client. In our industry people do not come banging on the door saying they need life cover, they don’t think they need life cover until it’s too late – we’re not Tesco where you go online and buy what you want. There needs to be that interaction between an agent and the client.”
Cole goes further in saying that there are clear instances where giving the client the flexibility to move their money around, without advice, could be potentially disastrous, for example when a client has been sold the idea of investing in a new unregulated fund.
This viewpoint fits with Cole’s ethos of offering an advice service with client care at its heart – a challenge to the picture some may have of the advice market in the UAE.
“The perception of the industry in the UAE is poor, perhaps due to the many years of minimal regulation and illegal brokerages being allowed to operate outside of the existing regulations,” says Cole.
Changing attitudes
While it may take time to alter this perception, Cole suggests there is at least one relatively simple step which providers can take to bring about change.
“If providers collectively agreed not to allow their products to be sold by unlicensed advisers, it would cut off their ability to make money,” he says. “We could wait for the regulator to do something but they are concentrating on the general insurance market at the moment, which is arguably in a worse state, so we could be waiting for a very long time.”
For the more immediate future, Cole expects his advisers to continue to sell what they have always sold – protection and savings products.
“From 1985, when I started, to the present day, clients’ needs have not really changed – the underlying investments and how products are accessed, yes, but not the need for protection and savings products,” he explains. “People don’t plan to fail, they just fail to plan.”
