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“Evolved Advisers” Anti-disruption Strategies to Secure Another 20 years of Active Adviser Life

What is a Professional Adviser?

An adviser is a person who applies their superior knowledge and/or experience to tell others what they need to do to achieve their desired outcomes, based on current and anticipated circumstances.

A professional is a more complicated concept. In essence, they are an identifiable, elite group of individuals, characterised by a collection of shared characteristics:

  • Specialised knowledge, expertise, experience and judgement not possessed by ordinary members of the public. May go to great lengths to protect their domain through the use of technical jargon, restricted distribution channels, and regulatory/legislated monopoly powers.
  • Possess the ability to deliver their expertise in a predictable, practical, trustworthy and reliable manner to their clients.
  • Members of a self-regulating body that imposes educational, training and currency requirements, and specifies ethical and professional practice codes of conduct, which amount to non-negotiable performance standards that all members of the profession must observe.
  • Entry and acceptance require appropriate personal credentials, and satisfaction of educational and professional assessment requirements of the parent body.

There is an underlying assumption that professionals offer services that ordinary individuals cannot perform for themselves, because life is too complex and demanding for any individual to be able to do everything.

The origins of the professions can be traced back several thousand years to early physicians, orators (lawyers), builders/stonemasons etc. As society evolved and demand for the services of people with more highly developed (“evolved”) skills grew, these individuals began banding together to share their knowledge, advance their skills and grow their occupations.

Eventually, these bodies became exclusive and elitist, as their members gained increasingly higher status and remuneration.

As Richard and Daniel Susskind say in “The Future of the Professions – How Technology will Transform the Work of Human Experts” : “life is complex and demanding, and people often need reassuring and trustworthy guidance when their general, everyday knowledge and experience is insufficient to sort out their problems. More than this, people need protection, primarily from quacks, charlatans, and sometimes from themselves.”

Current Challenges

The professions have thrived, for several hundred years, in a print-based, industrialised society. BUT, we are currently transforming into a technology-based, internet society. In the same way industrialisation replaced agrarian focus, and automation / robotic technology has recently displaced swathes of manufacturing labour, we’re already undergoing another fundamental shift that is at least as profound in its implications as those earlier transitions.

In many professions, measures of successful performance now have more to do with profits than client satisfaction. When cash trumps culture, and the search for profits defeats the observance of ethics, the “grand bargain” implicit in the concept of professional advisory work, seems to have disappeared.

That “grand bargain” is the deal struck between the professions and the societies they notionally serve. Like any bargain, it needs to satisfy the needs and interests of all relevant parties, so everybody perceives they benefit: the professionals receive status and remuneration; their clients receive the services they need and want in return, at reasonable cost.

Arguably, the professions are struggling on several fronts:

  • Economically – most ordinary people cannot afford to employ top-quality professionals. A senior partner in a major law firm was heard saying that he couldn’t afford to hire himself to dig himself out of a hole, if he fell into a deep one.
  • Technologically – in many ways the professions have only used technology to improve the performance of some limited and relatively obvious aspects of traditional practice. It would be a rare practice that has completely reinvented itself, and its fundamental operations, to maximise the potential of modern technologies. They tend to either be very large (huge resources) or very small (zealots). The vast majority are swinging in the wind.
  • Psychologically – the protective paternalism demonstrated by many professions towards their clients is profoundly disempowering to those clients. The current epidemic of increasingly low levels of emotional resilience undoubtedly has some of its basis in the relatively recent phenomenon of extreme over-reliance on external experts (eg: trips to the doctor for the slightest reason and over-reliance on antibiotics to address health issues).
  • Morally – the more each individual in a society knows, understands and can do, the stronger that society will be. The development, sharing and distribution of knowledge is one of the key platforms on which modern societies are built. The protectionism displayed by most professions, as regards the knowledge that underpins their unique areas of activity and income, runs contrary to this moral imperative for society as a collective.
  • Performance – professions tend to work on a “time spent” basis, rather than on a “value delivered” basis. The latter is how almost all other business transactions are conducted. The price: benefit (value) equation has become increasingly tenuous, to the point where many clients complain about their fees being too high, while their advisers are under increasing pressure to maintain profits as their expenses soar. You don’t have to look very far to see whether clients are happy: >50% of litigation clients fail to get what they expect; medical & psychological patients can be in treatment for years; financial planning clients pay as much in fees as they receive in returns, and so on. Oh, ….. and did I mention the GFC?
  • Accountability – clients are frequently unable to objectively assess the quality and value of the services they receive. The “inscrutability of the professions” is one of its major self-protection measures. However, it’s arguably a long way out of place in modern societies that value transparency and being fully informed.

Impediments to Change

As institutional groups, the professions tend to be extremely conservative when it comes to protection of their own privileged positions in society. They’re happy with the status quo, so why change? Those in control therefore resist pressures to evolve, or at least slow down the process.

In the absence of credible alternatives, the fear factor that many people have when in positions of vulnerability and/or in need of help, tends to prevent them from straying far from tried and tested (credible) formulas.

The critical question for them is: “how do we gain access to knowledge and expertise that is safe and reliable?”. The professions have ensured that the consuming public looks to human advisers to provide this expertise. For a whole host of economic, social and practical reasons, until very recently this tended to mean using real people who were readily accessible.

In our new technology-based, internet society, communications are vastly more powerful and available than ever before, and knowledge is far more widely distributed – through global education, increased trans-border work experience, and digital information technologies. The paradigm is changing!

Some Questions for Professional Advisers

  1. Why are you an adviser? What do you consider to be your mission / reason for practising?
  2. Why do clients obtain your services – so they can get a legal / accounting / medical / psychiatric solution, or just to get their problem solved as painlessly as possible?
  3. Do they care what you do, or how you do it, or do they just want you to be effective?
  4. Are there entirely new ways to perform professional work that could be more affordable, accessible and efficient than traditional approaches?
  5. From a consumer perspective, what are the risks?
  6. From an adviser perspective, what are the risks?
  7. From everyone’s perspectives, what’s likely to happen to your clients and your practice if fundamental change isn’t embraced? (ie: could an “extinction event” be just around the corner for some or many professions if they continue in their existing form?).
  8. If humans need to continue to do some professional work, does it all need to be done by highly qualified individuals, located nearby? The use of lesser qualified labour, and outsourcing to less expensive jurisdictions, could be part of the answer.
  9. Are the advisers the best people to judge what they need to do, within their own professions, to preserve its and their futures? Is this like asking rabbits to guard the lettuce? As Aristotle said: “the guest will be the better judge of the meal than the cook”.
  10. Is the “grand bargain” actually working for consumers? The GFC appears to provide a compelling response!

Knowledge and Know How

Substantive (technical / intellectual) knowledge = “know-that”.

Practical knowledge (how to get things done) = “know-how”.

“Know-how” eats “know-that” everyday …. for breakfast. Knowledge without practical application is useless to clients: “We performed a successful operation, but unfortunately the patient died” is not what they want to hear, or pay for.

Clients want practical expertise, which includes knowledge, application skills, judgement, and successful experience (track record). Increasingly, elements of this will be made available through evolving technologies.

New Technologies

IBM’s “Watson” is a supercomputer with “artificial intelligence” that responds to questions framed in normal language. One use is as a diagnostic tool that draws upon far more medical research than any individual, or group of individuals, could possibly process, much less apply. It beat 2 former winners in the US quiz show “Jeopardy” in 2011 (and won a $1M prize), and provides guidance for complex medical treatments that are accepted 90% of the time by medical practitioners (doctors and nurses).

There are more individual visits to medical diagnostic websites than all physical visits to doctors in the US.

Technologies like “FitBit” indicate that at some time in the future every individual will be able to monitor many aspects of their health without human intervention, with assessments being performed through customised databases that contain huge amounts of received information / knowledge / wisdom / practical expertise.

Education is using technology to distribute learning to vast numbers of people. Massive Open Online Courses (MOOCs) can present the world’s best minds to hundreds of thousands of students. 300,000 is the largest single course enrolment to date!

These are complemented by SPOCs (Small Private Online Courses).

The move is from: “the sage on the stage” to “the guide on the side” as increasing amounts of “core smarts” are delivered through technology, rather than through key individuals.

In 2014, 48M taxpayers used automated systems to prepare and lodge their tax returns in the US. Online accounting software can now do many of the routine tasks traditionally performed by accountants.

In the same year, Accenture and Cap Gemini had 1/3 of their total staff located overseas, mainly in India, to provide information and analaytic services to front facing staff.

Practices are evolving from reactive compliance work to proactive planning work. It’s estimated that only 1% of tax advisory work as it is currently practised will survive computerisation. This equates to 3M full time jobs around the world.

In 2010, Eric Schmidt, Chair of Google, estimated that it then took 2 days to create the same amount of data as in the whole of human history. By 2020, it will take only hours.

Big data – data analytics = mathematical probability applied to large amounts of data to predict outcomes.

In 1997, IBM’s Deep Blue beat Garry Kasparov and other world chess champs through brute computing power, not by doing human thinking in better ways. It used a different process that played to its strengths and competences. It’s almost certainly wrong to think that computers will solve problems the same way humans do.

Consequences for Advisers

Evolve and adapt, or wither and perish. “It is not the strongest of the species that survives, nor the most intelligent, but the one most responsive to change” Charles Darwin
Strategies for Advisers

  1. Move from reactive to proactive practice – help clients to plan, rather than help them to respond.
  2. Streamline and automate your reactive (routine and compliance) work as much as possible, using new technologies and other modern resources (outsourcing etc).
  3. Provide ready access to information to clients, and guide them in its effective use, rather than protect its creation and distribution.
  4. Be seen as a know-how expert, rather than as a know-that expert. And get really really good at getting the job done.
  5. Engage in the internet of things – become digitally visible and work hard to have a great digital profile.
  6. By all means be seen as an authority in an area of relevant specialisation, it helps differentiation and client attraction, but not at the expense of being seen as a practical doer.
  7. Shift your focus to identifying and satisfying your client’s objectives, rather than being tied to traditional professional products and services. This means becoming demand-based, rather than supply-based. Assessment tools and processes can help. Understand that your client needs to make a hole because they want to hang a painting, they don’t buy a drill for the sake of having a drill. Purpose is everything!
  8. Beware the professional syndrome: “When the only tool you have is a hammer, you may tend to regard every problem as a nail” – Abraham Maslow. Analyse the clients’ real needs on every level – this requires a lot more focus on holistic diagnostics.
  9. Engage in and build collaborative networks of complementary advisers to be able to address a wider spread of issues and needs than is possible from any single professional perspective. Learn how to spot the need for cross-over referrals and support.
  10. Understand the difference between professional collaboration and professional co-operation. One involves selfless, interleaved cross-overs, the other is about self-protecting hand-overs.
  11. Focus on building skills in human areas of activity that are less subject to mathematical analysis and less threatened by impersonal responses.



Written by Family Business Institute

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