Why I’m glad Rich List lacks anyone made wealthy by advice
Every year I scour the list of 1,000 names looking for someone who has made it into that hall of fame following the advice of their IFA.
Recently I have been reading about Britain’s youngest millionaire musicians, actors and entrepreneurs. This can only mean one thing – The Sunday Times Rich List will soon be published.
These ‘teasers’ are a feature of the whole Rich List hype ensuring that on 29 April there will be a queue outside the newsagent.
The hype works of course, and every year I purchase a copy of the Rich List, though now I download it to my iPad. The marvels of technology, I have a paperless home!
Every year I scour the list of 1,000 names looking for someone who has made it into that hall of fame following the advice of their IFA. It has never happened of course. I have seen the names of people who have made their fortunes looking after other people’s money, but I do not see anyone in the list suggesting that their financial adviser made them wealthy.
Do not get me wrong, I am not about to start knocking the industry. Though I am reminded of that wonderful old book Where are the Customer’s Yachts written in the 1940s by Fred Schwed.
There is a reason I scour the list every year is because until I see an entry from someone who has made the list through the effort of their financial adviser, I will keep telling my clients that it is not my job to make them wealthy. In fact, I go further than that. I tell them that if they want to become wealthy, that is their job. It is the reason people work 12-hour days, take business risks, or monetise their talent.
My role is to help client’s preserve what they have accumulated. I might be asked to make their money sweat a little. After all, clients do not want their money sitting by the pool sipping pina coladas while they are breaking into a sweat making it. But it is a hard concept to get across, particularly when decades of fund management advertising has focused on growth rather than sustainability.
I will keep telling my clients that it is not my job to make them wealthy
Instinctively most clients already know this. When I discuss with clients how they see my role, I am rarely asked to make them wealthy, yet seemingly they are expecting me to promise it.
So when I tell them that I am not going to pick a ‘ten-bagger’ stock for them, or predict which fund manager or sector will outperform this year, they understand, eventually. The trouble is that so much of what they hear, see and read does seem to imply double-digit growth year in, year out.
So when I meet prospective clients, they are waiting for me to promise something similar. Instead I say something opposite to most of the other information they receive, such as: “I am not going to make you wealthy, that is not my job.” This causes their faces to contort as they are trying to figure out what my angle is. But I do not have an angle. And when I tell them I do not have an angle, their faces contort some more.
More from Dennis Hall
- I’m afraid it’s the end of the line for me
- Income and profit data will force tough client choices
- Providers making less effort to help with tax year deadlines
- Clients will question value for money of advice fees