'You can't make an investor out of a saver'
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Advisers should not waste their time trying to turn cautious savers into investors, according to industry speaker and author Nick Murray.
Speaking at the Institute of Financial Planning annual conference in Newport last week, Murray said advisers need to judge clients’ attitude to risk before recommending that they take out investment products.
He said: “I defy advisers to make a successful investor out of someone who is fundamentally fearful of the future. The difference between an investor and a saver is that an investor is running on some octane of the fuel of faith. Savers are running on fear.”
Murray argued that although cautious clients can be convinced to buy equities, they will never be convinced to hold them because they will panic, which could unravel the portfolio that has been built for them.
He added: “There are any number of good-hearted, well-intentioned advisers who have broken their hearts trying to get fearful clients to be faithful investors. It is a waste of time and energy. Get up and walk away.”
But Philip J Milton & Company managing director Philip Milton says it is up to the adviser to make clients aware of what they need.
He says: “Possibly the one thing Murray forgets is that people are coming to us for financial advice. They are describing their circumstances and asking for help and guidance, otherwise, that so-called risk-averse saver would never take out a mortgage or a loan.
“It all comes down to educating the consumer.”
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