Last year, while presenting at the Personal Finance Society conference, I reminded the audience: "Helping people get what they want – that's what we do".
But then, as often happens, a crazy thought found its way into my head. I exclaimed: "Financial planning – it's the sexiest job in the world."
"Wow, that was good", I thought to myself, rather smugly.
It must have resonated with a few in the audience too, because heads went down and they started to scrawl some notes (it's always a relief to see that happening).
Trouble is: I've not been able to stop thinking about that statement ever since.
I was right! Financial planning is the sexiest job in the world.
It helps people to identify, achieve and maintain their desired lifestyle; it helps people live life to the full; it gives people clarity and confidence over where they are heading; it gives people more time, more choices, more freedom, more life.
That's what I call financial planning. We have the power to change client’s lives for the better. It really is sexy.
So, if that's the case, why aren't people queuing at the door for this amazing service? And why aren't people queuing to join our ‘profession'?
Perhaps others don't see it for what it really is. And why might that be?
I believe that financial planning has become the most misunderstood term in the English language – primarily due to the vested interests of the product pushing, asset-gathering industry. Most advisers (including far too many CFPs and Chartered planners) think financial planning is something to do with arranging products and investments, or using up various tax allowances, or rebalancing portfolios, or sorting out a pension transfer, or generally implementing a financial transaction.
It's not. These are things you do, if necessary, after you've done the financial plan. I believe all that stuff falls under the banner of ‘financial advice', or ‘investment advice'. It's definitely not financial planning. Not where I come from.
Besides, most clients find that stuff really boring. And it certainly ain't sexy.
Proper financial planning is really about connecting with clients, understanding where they are in their life, how they got where they are (i.e. what's their story?). It's about being genuinely interested in another human being – and where they are trying to get to; about the life they have and the life they want.
Ideally, it's the process of uncovering what they want to be, do, or achieve – for themselves and their family – before it's too late. It's about helping folk do stuff before they're too old to enjoy themselves… or before they're in a box!
Life is not a rehearsal. I think it's an important part of our job to remind clients of that.
In other words, what sort of life are they living now and what sort of life do they want to live in the future?
Then the big question is: What is the cost of their current and desired lifestyle? And what do they need to do to achieve it and, more importantly, maintain it?
That is where proper financial planning comes in: Identifying the resources available to them now, the resources that might become available to them in the future and, more importantly, the resources that might need to become available in order for them to achieve their life plan without ever running out of money, or dying with too much.
A lot of advisers have forgotten this. They've lost their why. They've lost their purpose. And sadly, it shows. They actually think their job is to ‘manage money' or fiddle with products and investments – the money stuff.
Yet products and investments are simply tools in the bag to be used, if required, to get the job done. I find it absolutely amazing how many advisers have built a client service proposition that revolves around the tools in their bag. And, get this, some have even allowed their 'investment philosophy' to become their service proposition! That's weird. And very stupid.
It's not surprising advisers have lost the plot, what with regulatory pressures, the focus on higher technical qualifications, not to mention the ongoing pressure from the ‘industry' to keep peddling its products... the distractions go on and on.
So, if advisers have become boring, or overly technical, or no longer able to communicate their service in a compelling way, then it's not necessarily their fault. The industry has been messing with their heads.
But what do clients want?
They want the benefits. They want the sexy stuff.
Clients assume you are well qualified, experienced, trustworthy, independent, unbiased. These things are not sexy. They are mere expectations. Just like when they deal with a doctor, clients expect him or her to give them the right medicine. They expect us to subscribe the right product. Remember, the right product is not a benefit – it is an expectation.
Right now, more than ever before, clients need the clarity and peace of mind that only we can deliver through inspiring financial planning. They need to see for themselves, through proper financial planning incorporating meaningful cash flow modelling, what their future looks like and just what is possible.
That is when clients really engage with you and your service. That's when they're happy to pay you well, and keep paying you well, for delivering a service that totally focuses on getting them what they want.
Interesting times lie ahead....
We're now moving to a transparent, explicit 'fee-only' world. Clients are starting to ask questions. They are starting to understand more and more just what they've been paying - and what they are now being asked to pay - for financial advice.
So, be warned. If you are not knocking clients' socks off with your service, sooner or later, somebody else will.
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