On being explained the solution to a present-day pension problem I overheard a colleague reply: “why does the Government make it so complicated?” Quite.
But it is good news for us really because if we find it tough going, our target market certainly will. After all, they want to get on with living life and it is our job to navigate the forever changing cross-winds in personal finance and draw up a simple way to explain the impact on them (and perhaps their parents and their children as well).
The Government’s relentless attack on pension policy has meant planning in this area becoming a bigger challenge. Prospective changes provide a big nudge to 40 or 45 per cent taxpayers to take risks with venture capital trusts and get money into small businesses, for example, or spend in an attempt to save the economy from deflation. It is left to advisers to not just explain what is about to happen but to bear the responsibility of making sure the taxpayer is not nudged completely off their own life plan.
And it is not only the Government that causes confusion. Consumers are having their heads turned by so-called experts in the mainstream media who have the easy job of explaining the past really well and why their product is the next big thing to deal with the next big problem.
Chances are the man who says we are doomed has short positions in the market that need to come off, while the one who says the future is bright is sitting on long positions. This results in a tug of war that requires the casual observer to have long lie down in a dark room.
Indeed, there is no point asking a property consultant or a salesman selling blue-chip funds about the direction of property prices as they are the very people who pay the money-hungry media for their agenda-driven voices to be heard.
Similarly, it does not help when the Bank of England gives the laughable impression it is possible to know what will happen by issuing forward guidance when, in fact, to date it can hang its hat on nothing. No one knows what will happen. No one has a crystal ball. It is not a gameshow we are dealing with here but real people’s lives.
Over the years, I have found two qualities in an adviser highly valued by clients against this noisy backdrop. First, clients’ fear of missing out on responding to screaming headlines to improve their finances can be quashed if they have a strong sense of leadership from their adviser.
Second, timely communications to keep clients informed of progress – however small or large – can abate the constant din of distractors.
Both these qualities are magnified with the warm human touch as opposed to the cold steel of the robo-advice world. With continual Government interference and so-called experts getting it wrong time and time again, advisers worth their salt will be in business for an awful long time yet.
is a chartered financial planner at Radcliffe & Newlands