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The pros and cons of ‘standard’ in compliance

Russell Hutchinson asks what standard of advice do you want to offer your clients.

Wednesday, September 16th 2020, 10:53AM

Standards are great. Minimum standards especially.

Take power sockets. It is easy to see how power sockets have made life easier and safer for consumers and manufacturers of equipment. With DC powered devices the multitude of different cable and power standards creates problems.

Gradually USB-C appears to be winning out as a standard. I look forward to the day I could confidently leave AC power adapters at home and rely on a new standard.

We could easily write similar examples from the value of standard currency (at least across regions) and standards in, for example, aircraft safety – which is dramatically better than road safety, where the single most variable condition (how people drive) leaves a lot to be desired in standardisation.

But standards are really boring. Standard means not different. Yet consumers like quite a lot of difference in lots of areas: fashion, careers, home decoration, even education offers a bewildering array of choices.

Standards often underpin areas where there is a lot of mass customisation – although there are a handful of smart-phone operating systems only two are large, and one has a majority share globally. But within those sets of standards there are, again, many different phones, and so many different apps, skins, cases, accessories, plans, and other choices to be made that I doubt any two smartphones on the planet are alike.

Standards and design flair can co-exist nicely. Architects and engineers working together can create amazing homes. What is the right mix?

Usually standard is cheap, and personalised is expensive. That reflects the effort required. There are lots of good, cheap, standard tech solutions, for example. There are some that are expensive, and somewhat customised.

The problem, much like when the FMA gets grumpy about index managers charging high fees like an active manager, is when you get charged a super-premium price for something absolutely standard.

Good financial advisers can create financial outcomes for their clients – how much will be standard very much depends on what you want to achieve with your business. I know that the extremes can already be crossed off the list. If you don’t want to do any customisation – you opt for 100% standard – then you look like the first business ready to be replaced by a robot. If you opt to do everything yourself and use no standard components you will run a fabulously expensive artisan-style business.

The middle way broad and roomy: you choose to curate a mixture of standard systems and your own unique approach to create processes and plans that work for your clients while preserving your own identity.

Tags: Opinion

« How to write about moneyWhat the heck is a consumer data right? »

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