Speaking on the adviser panel at the London Personal Finance Society Symposium in November, I was asked a question by Steve Gazzard. “What is it that clients value from their financial planner?” he said.
I replied: “They like the 20 per cent guaranteed returns from the Ucis products we sell to them.”
In my head it sounded funny and there was a spattering of giggles from the audience, so hopefully they realised I was joking.
On a more serious note, though, I agreed with my fellow panelists that what clients really value is “the plan”. This is what they are prepared to pay money for. Whether the plan is a full-blown one covering every possible aspect of their future financial lives or a cut-down executive summary, this is what the client is really after.
Some planners have taken this a few steps further and become life planners or life coaches, linking up the financial planning steps with the more relational aspects of how people feel about money.
I guess it remains true that people do not really want an Isa or a pension plan. What they really want to know is what that Isa or that pension plan can do for them.
How will those products provide them with a stream of income that enables them to retire when they want to, perhaps earlier than they had anticipated? How can they ensure they are never going to run out of money?
A plan helps them answer those questions and shows them why they might need those products. So the real value lies in selling a solution, not a product.
The future is bright for financial planners because the plan is all about human interaction. It is about understanding what is important to the client. It is about questioning, probing and responding to the answers given.
I read a great book recently by Professor Brian Cox, entitled The Human Universe. In it, he describes the construction of the human brain and the numbers are staggering. Eighty-five billion neurons, each capable of connecting up with other neurons 10,000 to 100,000 times. No computer on the planet is as powerful as that. The human brain makes a robo-adviser look like a slide rule.
With this in mind, financial planning at the deep end is pretty much immune from the threats of robo-advice.
It may well become easier for a person to buy that Isa or that pension online but let’s not kid ourselves: how is robo-advice going to engage with real human beings and their emotions?
Every adviser I know can tell you a whole load of stories about the emotions they have had to deal with when in front of their clients. Our people skills are irreplaceable by an IT system.
This is evidenced by one question no computer can properly deal with. It is the client response to the question: how do you feel about that?
Nick Bamford is executive director at Informed Choice