By HELEN COOKE Managing Director, PBS Confidential Ltd
IT’S TIME
to get back to (financial) basics
Do you enjoy being in charge? Are you the kind of person who finds it hard to stay on the sidelines or are you happy to go with the flow? Of course, either approach is fine for the day to day things in life but what about when it gets serious? There are plenty of folk in our society who are quite happy to leave things to others, especially seemingly complex matters such as their finances, just stepping in if there is a crisis - but is a crisis really the time to jump back into the driving seat.
s“One of the most crucial tasks that your Adviser
hould take responsibility for, is to ensure that you face up to those difficult questions
”
Over the years I have become accustomed to speaking to individuals and business owners who take surprisingly little time over their financial plans, and routinely fail to update these plans as time passes and their circumstances change.
On the flip side, there are many who prefer to get up close and personal with their investments. Financial information is now available at the touch of a button and investors are able to access statistics and commentaries which would previously have been the exclusive ‘property’ of the banks and Financial Advisers. So, as we have become more financially savvy and with the reputations of the banks and financial institutions taking, in many cases, a well deserved bashing, it’s no wonder that more and more investors are going it alone.
It’s certainly true that the financial services industry has faced many challenges over recent years and we need to work hard to regain your trust. The focus has, quite rightly, shifted back to the needs of the individual, so your Financial Adviser should not just be someone you see when you know you need something. They should be proactive, building a long lasting relationship with
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you and keeping you informed even when there are no changes to recommend… how refreshing to be re- assured that your investments are ‘fit for purpose’ and that you don’t need to make an expensive change every time you speak to your Adviser. Perhaps more importantly, your adviser mustn’t go silent when things aren’t going to plan either.
One of the most crucial tasks that your Adviser should take responsibility for, is to ensure that you face up to those difficult questions: How do you plan to fund the education of your children or grandchildren? How would your business be affected if a key employee decides to suddenly leave? How would you pay the mortgage if you or someone close to you suffered a serious illness? We each have questions like these in our lives and by helping you ask the questions your Adviser can work with you to develop a plan designed to help you meet a financial crisis head on.
Your Adviser will look objectively at your investment holdings, many of which you may have retained for sentimental rather than financial reasons. We will not ignore the things that you think are irrelevant, and will talk about managing your debts as well as identifying if you are overweight in any particular asset class – exposing you to a much higher level of risk than you intended.
Your Adviser is also ideally placed to keep you up to date with any relevant financial news. You might feel you are well informed because you read the paper or check out a financial blog from time to time but only a specialist Adviser can tell you how a new law or rule might actually affect you, your family or your business.
With control comes responsibility So those of us who are providing advice regarding financial management also need to take stock. Investors are now generally well informed with a better understanding of the concept of risk and how the markets work. This allows the Financial Adviser to offer a different approach to their advisory services, one which allows shared control but which does not abdicate responsibility. The effective Financial Adviser
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