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Nick Bamford: The value of advice is all in the plan

One of the delights of the job that we do is to hear about the plans our clients have for their future.

For example, two of ours have decided to kick off their retirement by travelling around Europe for a year, and have purchased a very smart, actually quite luxurious, motor home in which to do it.

The gentleman has acquired a tee-shirt that sums it up nicely, emblazoned with the slogan “Adventure before Dementia”. Perhaps not everyone’s sense of humour but you can see where they are coming from.

While they are away on their grand tour they are renting out their home. The rental income this generates together with their pension and investment income is likely to mean they will have more money in the bank on their return than they had at the start of their adventure.

The adviser’s helping hand

Many people require some kind of help in making a decision like this. Indeed, that help can make all the difference between something remaining a dream and becoming a reality. Readers will know that this help is called financial planning. More and more people are beginning to understand that what is really valuable is having a plan.

I do not really like the word but that plan needs to be “holistic”, looking at all aspects of their financial life and drawing a line between the various dots. It needs to answer, as far as possible, important questions such as whether they can afford to do it without running out of money later on.

Of course, nothing about a person’s financial future can be absolutely certain but the planning process seeks to identify what reasonable expectations look like.

“More and more people are beginning to understand that what is really valuable is having a plan.”

Putting products to one side

Financial planning also includes financial advice. It may well be that the client requires a new financial product, such as a pension or an Isa, or some kind of adjustment to a product they already have.

Product implementation is important but it is not the most important part of this work. It looks good when we can tell a client they have perfectly suitable financial products in place and all that is required is a tweak rather than a wholesale change.

The real value is in the plan. Helping people to see how they can use their wealth to achieve their goals and objectives delivers job satisfaction to me and value to the client.

Perhaps we should suggest these soon-to-be-travelling clients pop in to see another of ours whose plan gave him the confidence to up sticks and go and live in Northern Italy. They could share a cappuccino together at a street café in Pisa, as he tends to do each day.

Retiring ahead of schedule is a classic dream for some of the clients that come to us. Showing them that they have enough financial resources to do so now rather than continue the tiring battle of work can be a real delight. It is about giving them a degree of certainty in an uncertain world and the confidence to take a leap.

As my client said: “Retirement is a big adventure and a step into the unknown, but we can start this journey with real confidence after working through our financial plan”.

That says everything about what we all do, really.

Nick Bamford is executive director at Informed Choice



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There are 11 comments at the moment, we would love to hear your opinion too.

  1. Interesting to see old ideas regurgitated. Over many years this is exactly what advisors were taught to do by people like Tony Reardon of AD. Planning for the future was based on lifestyle requirements that motivated people to rethink that after retirement was not waiting
    to die!!

  2. Paul Etheridge showed the way over 30 years ago!!!!

  3. Over to you Paul!

  4. I agree with Nick – however I am sure that he, like so many other advisers, charges advice fees on a contingent basis assuming investments are placed with his firm and fees facilitated through said investments.

    In other words, advisers give the planning advice (the most valuable) away for free in the hope of keeping the clients money under management and charging an annual percentage.

    Until financial advisers start charging fees for planning and are agnostic about how clients invest – or send them to Vanguard or similar to buy low cost index funds, clients will never understand where the value really is.

  5. @NB Is it the regulated world or the perception of the masses that advice = tangible product. The enlightened few see the benefit of advice/planning and the odd tangible product is just a by-product of the process. (Although I realise I’m stating the obvious, still thought I’d say it) 🙂

  6. I agree with David. Adviser Charging has become commission by another name. I suspect many Advisers don’t come up with a full “Financial Plan”, just investment advice, and this they do for “free”, they will only get paid if the client employs their services.

  7. No advice , free or otherwise , is not an option! What would it take to attract clients? Trust? Track record ? Recommendation ? Or even better a balance if all. Only problem is that someone somewhere will try to throw a spanner in the works by challenging the probity if the advisor .

  8. For ‘if’ read ‘of’

  9. Blue Eyed Monster 12th April 2017 at 3:22 pm

    Some of us have managed to split out the planning (unregulated) from the advice (regulated) and to also split out the charging. Its very simple really! As Nick says the value is in the plan. In fact the plan is the most valuable element of the relationship with the client so it is not something that should be given away free with a product. That only serves to demean the profession of financial planning. Fees for planning should be substantial enough for the business to be able to run without the need to sell any products.

  10. i 22nd August 2017 at 11:26 am

    I remeber being at Hambro Life – establish income and expenditure assess needs make sure it was affordable – nothing changes! No “artificial high level examinations “, or terms like “Independent Financial Adviser”, or “Chartered Adviser ” or “Certified Adviser”, or the American Certified Fiancial Planner (CFP)” Now incoprated into “Sissy”. It is intereting how some people like to think they are competent – whilst others are competent. Good advisers look at the entire lifestyle financial strategic plan – whilst tothers go for the Big Ticket Items ( for commissions/Fees instead of Fiancial Planning). Teh cost of an authorised adviser has increased due to the level of Tax Applied by the CONservative Govt – the increased cost of administration – increased FCA regulatory Fees, increased FSCS fees (see Gary Heath) – which are all passed ON TO CUSTOEMRS under FCA “Treating Customers Fairly” and charging them the aditional costs/Tax applied by the Govt and their Agents.

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