What do you do? Or, rather, what do your clients think you do? There are many facets to our roles and different individuals will value different aspects. But in a rush to differentiate, some firms are spreading their net too widely and either not focusing on where they excel or avoiding the areas their clients value altogether.
Historically, advisers tended to be generalists, equally dealing with many areas of advice: mortgages, investments, pensions and protection. From this, we were encouraged to specialise and find our marketing niche – after all, the man who chases two rabbits catches neither.
However, this trend seems to be reversing. Indeed, while many firms focus on specific client profiles, the services provided have become wider.
Some individuals are holding themselves out as life coaches, financial planners and financial advisers; roles that require quite different skill sets and may in fact draw the adviser into conflicts of interest.
There has been a particular rush to “soft skills”. Some advisers feel threatened by technology. I get that. If your total value to a client is risk profiling, supplying a valuation and selecting funds then, sadly, a robot can do your job. Often better if human foibles can be removed.
But even selecting a tax-wrapper is far from simple these days, with five different flavours of Isas, the vast array of transitional and tapering rules affecting pensions, and second-guessing how a withdrawal strategy might work in the future. When coupled with a robust long-term cashflow plan that is regularly reviewed, this should be enough to keep an adviser in work year after year.
What I find particularly bizarre is the rise of the life coach.
I have heard some advisers proudly boasting of invoking emotions in their clients at both ends of the spectrum: joy and tears. I find it strange that this is desirable. Surely the role of the adviser should be to gather information and objectives to disseminate and analyse, then present conclusions? The greater the neutrality and impartiality we present this information, the better. How the client takes the information is down to them.
Several firms explain that their primary aim is to help clients “live the life they want without fear of running out of money”. But I see the financial planner’s role as one which builds a plan with a series of steps towards achieving the client’s goal. If those steps are followed, the likelihood of remaining on track is high.
What the plan shows would either increase or decrease any fear in the client, and only the ongoing review and maintenance of that plan will give any assurance over the validity of assumptions.
Financial planning has raised its standards over the last 30 years, with the pinnacle of qualification now being chartered financial planner. But there is often an inverted snobbery in the circles I highlight above. There is a perception that if you are not focusing on the “big picture” emotional stuff then you are not doing the right job, irrespective of your qualifications.
The irony is, despite the focus on the alternative skills required for coaching and lifestyle planning, the level of qualification in this area is thin, beyond the inevitable annual conference.
An over-heavy focus on product outcomes is undesirable but so is skewing the other way. The advice element may be commoditised in the future and, if a client wants or needs a coach, they may not logically search for a financial planner.
It is the strangest hypocrisy that despite the dislike of product sales that surrounds the demography of the lifestyle coach, the greatest proponents show the thinnest substance behind their promises: light on detail, heavy on emotion.
Alistair Cunningham is director of Wingate Financial Planning