In a world where product providers argue over being small percentage points cheaper than the competition or declare Fund A better than Fund B there is value in a great financial planner.
Clients need someone who advises them to stay diversified, disciplined and to ignore the apocalypse du jour or investment of the week.
But the greatest value a financial planner can provide is to ensure clients don’t make the big mistake of selling out at the bottom of the market then trying to guess when to jump back in.
US investment commentator Nick Murray says most real life investment returns are as much down to investor behaviour than any other factor.
Most real-life investors do not get the advertised return owing to the fact that they are constantly jumping in and out of the market, encouraged by the financial press or even their broker, when often doing nothing would have been the best approach.
The recovery in share prices since 2006 and 2007 is proof of this.
The IFA who said ‘don’t do that’ i.e. sell at the bottom when all hell broke loose is worth many times more than the fee they received.
Iain Wishart is chartered financial manager at Wishart Wealth Management
