What value-for-money looks like

How closely do you look at supermarket shelves?

Supermarkets these days have to display a “price per 100g” (or per litre or equivalent) under the unit price of certain goods. It gives the shopper the option of being guided by price, or by value. They can choose what’s important, but the unit price is invariably bigger than the cost-per-weight because I suppose deep down we’d all prefer to judge by price, not value.

Warren Buffet’s famous quote “Price is what you pay, value is what you get” works to disassociate the two nouns. But even after you’ve left the supermarket it’s price, rather than value, that grabs the attention of the buyer.

In part, that’s because price is easy to compare across a range of providers; value is harder to pin down. You can go to an artisan market and pay four pounds fifty for a loaf of bread; its value is defined as much by its location as by anything else. The NACFB regards its membership as something like the artisan loaf, but at a Co-op price. We are now charging an attendance fee for some of our events (specifically, the Compliance ones). This puts us in new territory and sometimes leaves us explaining to our members why we feel the fee constitutes good value. Which we do, because we’ve been independently told that’s the case.

What the FCA makes clear is that shopping by price alone is not smart. To be fully compliant, a broker can’t simply demonstrate that he or she has chosen the cheapest option up front, nor the cheapest in the long term, necessarily. “Best” doesn’t even have to mean “best value” … because loans are not sold by the gram……. Is this loans or loaves?

The Compliance events charge comes about because we’re adding these on top of the usual annual programme. They don’t replace anything we would otherwise have been doing. They’re added on, and as such, the usual events budget won’t cover them. And they’re designed to help our brokers, directly and specifically. We can tell them exactly where they are falling short, by highlighting the most likely areas and checking those first. For example, some require help around Training & Competence and evidencing client outcomes. So you can see that these are being tailored specifically for the need of the Broker.

This is due to something we might call “racehorse in a zoo” syndrome. The kind of person who has a passion for his or her brokering business is unlikely to be creatively inspired, or even satisfied, by sitting down with someone else’s training programme. Or drawing up template documents for events that probably won’t happen. Or reading a 248-page book for what appears to be a tangential qualification … one which your client might not attach any meaning or weight to. If you put an entrepreneurial individual in a repetitive administrative role – even if only for a few hours per week – you won’t get them at their very best. So, they are going to need a nudge, or a focused event, to get it right.

Tailored advice for each broker is key, in exactly the same way as a broker needs to tailor his or her advice to each and every client. This means that when push comes to shove, the good broker will have no choice but to disassociate “price” and “value”. There are days for the value 800g white loaf, and there are days for the hand-baked spelt-and-rye. Whether it’s the NACFB selling a product to a member, or the member sorting out a loan for a customer, the fit is everything.

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