Chief Executive at FEIFA / FECIF Secretary General
The moment I realised the value of (human) advice
This was (almost) the title of an article I recently read – and which reminded me of the fact that many advisers don’t always realise just how much positive impact they have on people’s lives. Or where that impact is most beneficially experienced by the client.
One adviser stated that giving clients certainty about their financial situation as they faced redundancy was a key breakthrough moment. The experience showed him how good financial planning can add value and give people peace of mind.
Another adviser felt that the moment he realised what financial planning was worth came from wanting clients to be more engaged in the financial planning process. His firm subsequently moved to focus more on cashflow planning and objective setting, rather than reviewing funds.
A key moment for another adviser came early in his career with one of his first ever clients. The client was in her mid-40s with two young children and she was recently widowed. Her life had just been thrown up in the air and she needed some help organising everything. “She turned up at my house with a massive box of papers. She was so all over the place, she did not really know what was going on and just said, ‘here’s everything, can you just sort it’.”
One thread that runs through all of this is that it was the human interaction, engagement and relationship that provided the main source of value for the client. None of the true value felt by the consumer could have been delivered, at least at present and for the foreseeable future, by any automated service (If you have read past articles and editorial that I have written you will know that I generally avoid the use of the term robo-advice, mostly as it is usually a misnomer).
Only a human adviser could really have provided the total service that these clients needed and wanted – and only a human could have done so in such a successful and beneficial manner.
A separate article that caught my eye was entitled: “Over 50s underestimate life expectancy”. Apparently, according to recent research, as many as 78% are significantly misjudging how long they will live. Amongst people surveyed in the 50 to 64 age bracket the average respondent said they expected to live until they were 82. However, UK Government statistics estimate that men in the age range will live to 88 and similarly aged women to 90!
Once again, an area where a human adviser can bring much-needed realism and knowledge to a situation – and help a client to face the actual truth rather than their subjective and understandably biased ideas.
A final thought revolves around a further example in the first article mentioned above. This involved an adviser putting together a proposal but needing to convince the client as to why they should pay the fee (this was 15 years ago and thus very much in the “commission era”). She remembered the conversation with the client about how she could justify the fee – being really clear as to what the client wanted and where she could add value. This was the first time the adviser had turned around and said: “This is the fee, it really doesn’t matter where it comes from but it is the fee you are going to pay for the management of your investments and I am going to deliver value and I know what I have got to do here. This was the first time I realised I could do things my own way. I haven’t looked back since.”
What to take away from all of this? Not only can human advisers deliver services and benefits that cannot be fully provided by totally automated facilities, they can also charge a fee for doing so.
I hope that 2018 proves a good year for you and, most importantly, for the continued development of the advisory sector.