View more on these topics

Making an informed decision

It is said that you can only judge the quality of an investment when it comes to an end. I decided to fund my mortgage in 1986 with a low-cost endowment. The maturity cheque arrived this week. The target was £20,000; the maturity value was £17,500.

Now, this is not a catastrophe. On the plus side, I made about £2,000 when the company demutualised. When I moved house 13 years ago I took out a bigger mortgage, with the balance on repayment, so at most I am probably looking at an additional six months’ payments. However, I think there is a bigger lesson to be learnt from my experience.

In 1986, I had a choice of two options. Only one could give the best result but at that point no one could predict which one it would be. I chose the wrong one. I did not seek advice since (allegedly) I knew what I was doing. If I had been a layperson and sought the help of an adviser, the one thing I know for certain is they would have recomm-ended one option. This leads to a significant question. If you cannot be sure of the outcome, is it appropriate to make any recommendation?

It seems to me that a core part of the advice process is to help the client understand what we know and what we don’t know. When we come to a point where there is a choice, we need to make it clear that as the outcome is uncertain then they must make the final decision. Our role is to help them make an informed decision.

Selling involves certainty. I have identified your needs, I have identified a solution and I will try to persuade you to accept my recommendation. Advice starts with the principle that the future is uncertain. There are a number of options that could meet your objectives but I cannot tell you which one will be the best. What I can do is give you the knowledge to make an informed decision.

John Trayner

Audley Financial Training



Website urges investors to review with-profits

DMP Marketing is setting up a website called to encourage consumers to review their policies and direct them to an IFA in their region for guidance.

Caught on the opt

I read something the other day about the auto-enrolment of 10 million employees into pension saving in 2012. You probably already know the plot of this future horror story by heart. Ten million employees who currently do not receive a pension contribution from their employer will be swept into voluntary pension saving by legislation. The pension saving will be voluntary in the sense that if they do not want to save in a pension, they will be allowed to opt out of auto-enrolment.


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm