In the traditional sense that is…
In an industry plagued by a history of conflicts of interest, dodgy recommendations and hidden fees & commissions, things are changing.
Financial advice needs to add significant value in order to stay relevant. I believe advisers who are still product focused, with a value proposition of recommending an appropriate insurance policy, and guiding clients into their favourite managed fund selection are fighting a losing battle in a rapidly changing landscape.
It’s advice based on the above that has made people think advisers are just there to pick the best performing investment fund for their money.
Advisers love to say they help people plan their dreams but few I have ever met actually ask their clients what their dreams and deep ambitions are, let alone help them to work it out.
Clients are still experiencing the boring old questions like: How much money will you need when you retire? And, what income would your family need if you had to pass away? While this information is important, it’s a detail in a much bigger picture.
Client goals are constantly confused with strategies. No one has a goal of buying an investment property. The passive income that property represents isn’t even their goal. Their goal is the lifestyle or flexibility an asset like that could provide.
No one has the goal of earning $XXX dollars in retirement. They have a vision of their life and what they will be doing at that time in their life. The money is just the facilitator.
True financial planning should be an engaging process to help people develop what’s deeply important to them, what motivates them and what their vision is for their life. Only once this is clear can a true financial plan be developed.
Advisers constantly say they should be viewed as a profession but then complain when commissions are threatened. You can’t have everything, not anymore! With a real value proposition, the fee being charged is rarely an issue.
It’s time to help people develop their “financial life plan” and realise that what we do is about much more than just the numbers.
