I believe the 'Financial Planning' community needs to get its act together, and fast. Here's why...
This story is really sad. But, it might explain my ongoing often outspoken frustration with the 'Industry' - in particular with Advisers who miss the point altogether and fail to answer their clients BIGGEST questions.
I'd recently witnessed how this lady and her husband had 'suffered' in the hands of a well qualified (Chartered and Certified) Financial Planner who, a few years earlier, had happily taken a year’s full ISA investment off the couple, then in their early sixties. As you'll see, he had failed to identify their REAL needs.
Don't worry. This is not some sort of mis-selling scandal.
Just before this client died, they'd been introduced to me. They wanted to know, for sure, that SHE was going to be OK, financially.
At our first meeting they passed me a copy of the Adviser's recommendations from a few years earlier. This Adviser had obviously spent hours researching funds; he'd matched their risk profile perfectly, he'd produced a beautiful Reason Why / Suitability report to document his recommendation - and he'd invested his clients money into an ISA in a timely manner. I noticed he'd earned about four hundred quid.
"So, where's the problem?" some Advisers might ask.
Here's what the Adviser didn't do...
Because he asked the WRONG questions, he had not identified THEIR most important need: that these clients, at that time, were both still working in a job they hated.
All the Adviser had done was satisfy his clients' immediate need - for an ISA. So he HADN'T done any PROPER financial planning.
So, he didn't ask the right questions, he didn't identify the cost of their current and DESIRED lifestyle, he didn't crunch any numbers, he didn't do a meaningful Lifetime Cashflow (note the word 'meaningful')...
...he didn't identify that, at that time, they could, in fact, have retired immediately and lived happily ever after - without EVER running out of money.
They were, what I call, a 'Just Right' type of client: they already had enough money for the rest of their life - but they didn't know that!
Here's the worst part....
Sadly, three years later, 'Mr Client' - still stressed and working in a job he hated - found out he’d got a brain tumour - and just 6 months to live.
Result: three years of his life had been lost, spent working in a job he hated.
Worse! He'd been working when he could have been playing! In fact, these clients could have easily afforded to retire at least FIVE years earlier!
He could have been spending precious time with his wife and family - enjoying what turned out to be only a short amount of time they had left together.
But it’s too late.
Instead, he'd wasted his precious time working.
I believe their Adviser seriously FAILED them. What do you think?
Could that client still be alive today had the Adviser removed the stress and worry?
Should they sue?
He didn't do any PROPER Financial Planning - even though he was parading as a 'Certified' and 'Chartered' Financial Planner - and still does to this day. (I see him occasionally, poncing around at IFP events).
Now look, this Adviser was well qualified, well meaning and, no doubt, a 'nice' guy - but he hadn’t done the job properly. He’d focused on the wrong things.
He'd sorted out their ISA - but he hadn't told, what I call, the 'Truth About Money'.
And here’s the funny thing...
He’d only earned a fraction of what he could have earned if only he’d known a better way of doing things.
Question: Using the above client as an example, what value would you place on:
1) Arranging an ISA? (Traditional financial advice)
2) Freeing a client from a job they hate and enabling them to have the peace of mind and security that they can enjoy the rest of their lives without fear of ever running out of money, WHATEVER happens? (Lifestyle Financial Planning)
But this Adviser will no doubt say:
"But they only wanted an ISA!" "...they didn't want 'financial planning!'" ...or the old classic: "They didn't want to pay a fee!"
Balderdash, I say! Or words to that effect.
Are they a professional, or what?
Are they going to do the job properly, or not?
Are they a PROFESSIONAL Financial Planner - or an order taker?
Are they just peddling funds on behalf of the investment 'Industry'?
If so, they should STOP calling themselves a 'Financial Planner'!
The best fund, the best asset allocation, the cheapest product, won’t change a client’s life.
The Truth About Money will.
Showing clients where they are heading financially, answering their BIG questions - like ‘How Much Is Enough?’ - engaging with them about the important things, this is the stuff that clients want – and they’ll pay you good money for it! That is WHEN they find out and understand that you can actually do this!
In fact, isn't it our responsibility to do this?
When you choose to tell clients the 'Truth About Money' - by delivering Lifestyle Financial Planning - there will always be a little bit more work. You need to ask more questions. You need to crunch some numbers. You need to do a 'little' more than clients expect. You need to communicate your service in a different way. But it's worth it! That is what is needed in order to show clients what their financial future really looks like.
Clients won't understand (or pay for) Financial Planning until they EXPERIENCE it. Your job (IF you are a PROPER Financial Planner) is to help them EXPERIENCE it!
That's when clients take action, and that’s when they engage with you and your service.
Clients absolutely love it and because of this will happily agree to you being well paid - every year.
So, let me ask you a question.
Do you believe in PROPER financial planning - or not?
Do you deliver it to EVERY single client?
Or, do you have good intentions, but find yourself getting 'stuck' in the 'Transaction Trap'?
(If that's the case, don't worry - you're not alone. It's happening to 'Financial Planners' everywhere.)
Let me say again, clients won't understand - or want - Financial Planning until they EXPERIENCE it. That requires that you communicate your service in a different, more compelling way. It also means you need to ask better questions.
The good news is there's a formula.
Would you like to break out of the 'Transaction Trap' forever and start delivering a consistent, duplicatable service that truly knocks clients socks off?
Or do you want to be like most Advisers and just peddle products on behalf of the 'Industry'?
There is a world of opportunity out there for those of us who choose to do the job properly, who choose to do the opposite to most Advisers. In fact, do this well and you can really, really clean up. (I can show you how :-)
It's time to STAND UP for PROPER Financial Planning.
If you believe in PROPER Financial Planning can I ask you, please, to help us stand up for it by coming to BACK2Y - The Alternative Financial Planning Conference. It's for Advisers who want to be part of a Profession, not part of an 'Industry'.
If you'd like to find out more about making PROPER Financial Planning the focus of your service - so you get more of the right clients and earn bigger and better fees - then, just grab yourself a seat at BACK2Y - The Alternative Financial Planning Conference.
It's being held at the ICC (The International Convention Centre) in Birmingham on 6th March 2015. Last year we had a blast. This year we'll do the same.
There's no product providers present. No sponsors. No free booze or free golf balls. No 'Industry' 'stuff' messing with your head.
Instead, you'll get GOOD, HONEST, PRACTICAL & PROVEN ADVICE that you can take away and implement in your business straight away.
You'll learn from some of the UK's leading Lifestyle Financial Planners. You'll find out how they've changed their business in the last 5 years or so, to deliver highly PROFITABLE Lifestyle Financial Planning - and how you can do it too.
You really can do the same. It's not complicated. You just need the right mindset. And that's what you'll learn at BACK2Y.
You can grab your ticket by going here: www.BACK2Y.co.uk
Join us, and let's change the world of financial services, FOREVER!
Don't let me down. :-)
If you can't make BACK2Y - or you simply want to make 2015 your best year ever - then take a No Risk 30 Day Trial Membership of Inspiring Advisers which includes access to the 'formula' - the proven Inspired Adviser 'Seven Step Success System' - by going here: Your 30 Day No Risk Trial
Please leave a comment below.
"Paul, after many nagging emails I only “got into” your programme circa September 2014 and quickly attracted around £3M of new ADDITIONAL funds on the back of your processes in around 3 months. I embraced your message fully, setting my standards and minimums and how I “work” and have had the confidence to turn away people who don’t qualify or who don’t want what I now do. I truly could not now envisage giving anyone advice without using your process. It would be like a Surgeon operating without a full medical assessment on a patient and having a full picture about what he is trying to achieve!
On TOP of all the new business, my existing clients love it and I have easily increased my ongoing fee from those clients I've had chance to see from 0.5% to 1% for the enhanced service and 'experience' and this now earns me an extra £50K+ per annum - ALREADY! This has enabled me in turn to spend even more time on the clients I want to work with.
My goal for 2015 is to bring on another chunk of clients and their assets at 1% per annum, but only people who embrace what I do and who I want to deal with. In addition to that, I will be bringing my body fat percentage and golf handicap down to 12!
Thanks Paul – it’s been an awesome few months and I am more enthused about the coming year than at any time in several years!
Thank you for your continued guidance and inspiration."
Gareth Thomas APFS
Chartered Financial Planner