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Planning fallacies – the pushy little trend

Just because everyone else is doing it, doesn’t mean you have to.

Tuesday, January 15th 2019, 12:18PM 1 Comment

by Russell Hutchinson

Russell Hutchinson

Yet there are sometimes awfully pushy little trends nudging us towards sometimes expensive and difficult choices when we would, in fact, be happier where we are.

Alternatively, we might be delighted to be distracted by the enchanting little trend, but we may be better off financially working on our current strategy.

What kinds of trends attract our attention? Should we all become online only? Fee only? Social media leaders? Switch to a co-operative model? Crowd-fund? Make it look like Amazon or Uber?

Maybe not. Or maybe, just not yet.

The reason trends demand our attention is the fear of missing out.

Will those other advisers grab an advantage that we could have too? We fear falling behind. That’s a good fear to have.

But sometimes a trend isn’t really a trend at all.

It can turn out that nobody is doing this stuff – it’s just some people like me writing about things that aren’t happening.

It’s mildly interesting, challenging, but a cluster of articles by journalists and commentators does not make it real.

Even if it is a trend, would that make it worth doing?

Did you sit down one day and write in your business plan ‘don’t miss out on any trends no matter how unprofitable?’ Of course not, so your business criteria are already more important than the number of google search results for the current fad.

The presence of a trend may be useful as an indicator that you should examine an opportunity, but may not feature in your evaluation of the opportunity from a business perspective.

Your criteria for accepting a new project doesn’t change just because you are worried that lots of other people are doing it.

Does it bring you closer to your goals? Does it fit with your current skills, abilities, and strategy? Will it attract the right clients in the right way?

The more quantitative we can make the answers to these questions, the less we need to be worried about what trends say.

That criteria probably already includes issues like:

  1. Viability – do our target clients really want this? Will it be good value to them? Putting the client first must be central to business planning
  2. Affordability – do we have budget room to do this (capital and expense)
  3. Capability – do we have the necessary skills and expertise
  4. Profitability – can this contribute effectively to the required rate of return?

Tags: Russell Hutchinson

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Comments from our readers

On 19 January 2019 at 4:28 pm JPHale said:
Excellent points.

I had a call no so long ago from an older adviser and his question was, J-P can you help me with this social stuff. I said maybe, what's raised this question?

His comment, looking to tap into the new world. Ok. He's not that tech literate, and there's quite a bit needed in between that needs to be done.

My next question was why? To talk to more people, Ok, how are you doing that now? And he told me (something most advisers don't do and is relatively cheap and simple to manage).

And I said, is it still working? Yes. Is it doing what you need it to do? Yes. Do you need to increase numbers? No.

So carry on doing what you're doing. It works, It's effective, and it delivers to your needs, don't worry about the digital stuff right now, but learn about what it is

And in the meantime, he did work on this 'stuff'. 4 years later, he's going well and he's slowly building the technology in his business to allow the transistion once what he is doing stops being quite as effective.

In the meantime, he's had little stress, expense and frankly, he's had the capacity to focus on what he needs to without missing a beat.

Niche trends can be interesting, they can be deep rabbit holes with no exit too... Waiting, adjusting, and adapting is also a plan.

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