Posted 04.04.2018 in Wealth Planning
Everyone in Western Australia knows John Hughes. It is hard not to like a guy who built an empire from the ground up! From walking the Terrace in the 1970’s with briefcase in hand to convince the banks to lend him some money for his first car yard; to now having sold over 900,000 cars and still managing over 500 staff at age 82. Incredible!
In a recent CCI interview, Mr Hughes said “Competition is everywhere and the internet is to blame. Margins are shorter. It doesn’t matter what it is, everything has been cut to the bone. Where’s 49 years of trust and integrity? Stuff you Mr Hughes, what’s your best price? I read somewhere that people know the price of everything and the value of nothing. It is true.”
Equating price to value is something we all do from time to time, but I feel it tends to happen in areas where we are making decisions that we have no expertise in. Areas where we do not know the full picture but use price as a proxy for value.
A false economy? I think so, even though I find myself doing it from time to time. Buying a new mobile phone plan from an inferior provider who has a lower monthly ongoing cost and then wondering why I have no coverage. Internet from a third rung ISP and wondering why my Netflix drops out here and there. Apply this thought process to professional services, is it any different?
There is a lot of popular literature out there that is selling itself (the book, the audio recording) as a saviour for those who are paying too much. Too much for food, too much for wine, too much for financial services, too much for home loans … the list goes on. The premise being that the more you save the better off you are.
I think there is worth in this to a certain point, we all know saving is worthwhile! But when you consider purchasing a service from a professional services firm, the equation is far more complex than saving a nominal amount here and there.
Using Capital Partners as an example, you are taking advantage of 20 years of assimilated information on best practice regarding:
I won’t go through the full list, but even being top of class in the above, I think our value is understated if you look at the technical outcomes alone. I don’t think you can accurately ascribe a dollar figure to the greatest value we provide – the intangible benefits.
These are the powerful drivers, value that I don’t think you can truly understand until you have worked with a firm that has your best interests at heart.
Mr Hughes’ repeat customers would understand his value proposition, while those looking at cost alone would miss the point completely.
John Ryan is a Private Client Adviser with Capital Partners, an award winning Financial Advice Firm based in Perth Western Australia, helping people live richer, happier lives