They say that every dark cloud has a silver lining. So, where is the silver lining in today’s dark events? How hard does a person need to look before they see a little sparkle?
Well, cast your eyes here. As the master of the glass half full, I have mined a little metal. Here are my five reasons why today’s global meltdown is good for us.
1. It Will Take The Excesses Out Of The System. Our friend Brad, who lives in Western Canada, was talking about getting his windows washed. He and his wife Sandra have a beautiful house overlooking a lake; the side of the house that fronts the lake is mostly glass. So, Brad called in the window washing company he had used the year before.
When Brad got the bill, he was outraged. It was almost twice as much as the previous year — and the window washers had cleaned only the outsides of the windows. The year before they had done inside as well.
Why the huge increase? Did the guy running the company get so greedy that he thought he could charge what the market would bear? Did he get so short-sighted and arrogant that he forgot that at some future point he might need the goodwill of customers like Brad?
Today’s economic environment will give this entrepreneur — and businesspeople like him — his comeuppance.
2. It Is Punishing Those Who Thought Short Term And Were Motivated By Greed. Like our friend the window washer, there were a number of executives and leaders in the financial services industry who couldn’t see past the next quarterly report and the next big score. They traded long-term growth for fast money; they let profit and glory be a substitute for ethical behaviour.
These people needed to be brought back to earth and the current crisis has pricked their balloon. Now, no one wants to emulate their behaviour. It is just too bad so many others were dragged down with them.
3. It Reminds Us That If It Sounds Too Good To Be True, It Is Too Good To Be True. Take Bernie Madoff and his great returns. What more do I need to say?
4. It Will Teach People That What Goes Up, Comes Down. During the market boom, many people were happy to believe that it would never end, that they would retire rich, that they were smart investors.
Maybe now, in this new reality, those people will be a little more circumspect and make an honest assessment of their risk tolerance. Maybe now, when they work with an advisor, they will recognize that they, too, have a role in the advisor/client relationship and it is their responsibility to level with their advisors.
As Patricia Chisholm suggests in her page one story, maybe now is time to start telling your clients what you can’t do for them. This new reality will help them to accept that.
5. It Will Separate The Wheat From The Chaff. The latter are “missing in action.” These are the advisors who haven’t called their clients, who have buried their heads in the sand — who have put their own interests ahead of their clients.
And these are the advisors who will leave the business, and this will be good. There is no room in the financial services business for advisors who can’t put the client first, who don’t take a professional approach to serving their clients. The financial advisory business requires people who are dedicated to serving their clients with professionalism.
There is no doubt these lessons will be short-lived. But didn’t someone say, if we refuse to acknowledge the lessons of history, history will repeat itself? There is much to learn from today’s environment.
TESSA WILMOTT, EDITOR-IN-CHIEF
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