For our clients and colleagues in the personal financial services industry, April 2016 saw some new, debate-worthy regulations proposed by federal regulators. And with the Trump administration now in charge, the debate continues as to whether these regulations will be enacted, delayed, or killed. The debate stems from the concept of “fiduciary” service, and whether those in financial services should be required by law to act “in the best interest” of their clients.
At first pass, it would seem self-evident; of course they should act in the best interest of their clients. But as always, the devil is in the definition.
Those in financial services understand that the best interest of the client isn’t always self-evident and it certainly isn’t static. “The best interest” is a fluid concept (at best) and it’s not difficult to envision a scenario where wildly divergent recommendations could exist that could both be considered “in the best interest” of the client.
We aren’t here to settle the fiduciary debate. But it frames an important question for our segment of the world; should you want a marketing partner that acts as a fiduciary? Do you want an agency that “acts in your best interests,” regardless of what that means?
At first pass, it would seem self-evident; of course you want an agency that acts in your best interest. But again, the devil is in the definition.
By nature, the raison d’être for a marketing or advertising agency is to act in the best interest of our clients. We pique. We promote. We amplify. It’s baked into the very definition of what we do.
But on closer examination, the fiduciary element extends well beyond the definition of “marketing.” We can always produce a wonderful tagline, a compelling message or perfectly executed campaign that’s “in the best interest” of the client. It might be what they want, but is it what they need? We know we capture attention, generate buzz and deliver an abundance of eyeballs. But what if the client’s needs runs counter to this want?
Look, we love clients to have a laser-like focus on their product or service. We want them to be passionate! They are experts in what they do and this is why they need us. By nature, we are outsiders.
But in order to do our job, we need to eliminate the space between us. Hence the research, the competitive analysis, the key audience profiles, defining the buyer’s journey, and understanding why they buy. This outsider status affords us an overview of the big picture that the client may not have. And that’s where the fiduciary discussion comes in.
What if we recognize that a client’s needs, and how we can best help them succeed, run counter to to what they want? Maybe we recognize their attention should be less focused on social media, or PR, and more focused on building strong relationships with referral partners…or re-defining their services and engagement model…or changing their pricing structure…..or going after niche markets? Or maybe, what if the client needs something that we don’t do? Again, the devil is in the definition.
While so many may be quick to call us an “advertising agency,” in reality, what we are is a consulting firm that happens to be in the business of marketing, strategic communication and creative services. When you look at it that way, it reframes the nature of what a fiduciary relationship might look like.
Here are two questions you should ask yourself about your agency.
Does your agency have the business acumen to recognize when what you want and what you need may be different?
Any advertising agency can get by for a while selling clients on ideas or campaigns that they want. But if those ideas aren’t what the client needs—if they aren’t adding long term value—this approach will fail. In the short term, clients choose what’s cool, what’s sexy and what they think they want. But in the long run, they must choose that which consistently adds value. If they don’t, they won’t be around for long. It’s as simple as that.
Which brings us to the second question:
Do you and your agency have the kind of relationship that empowers them to tell you the truth?
An agency doesn’t need to be dishonest to not tell you the truth. They could very well offer you growth in the short run. It might be what you (think you) want. It might be sexy new logo. It might be a PR campaign that creates buzz and delivers eyeballs. But it might not be what you need.
“Yes” can be a terribly seductive concept to hear, especially for a smaller business with big plans. But you need a business partner who knows when to deliver the “no.” You need a partner who will put a voice to an idea, even if you don’t want to hear it or they don’t want to deliver it. Because sometimes, no is “in the best interest” of the client.
So…back to the original idea: to fiduciary or not fiduciary.
We aren’t here to settle the fiduciary debate. But it frames an important proposition for our segment and your future; is your best interest being served by what you want to hear, or what you need to hear?