I am grateful to have received a Special Supplement produced jointly by Financial Adviser and Investment Adviser.
I commend this publication, entitled Investing for Outcomes, to hit the top of your reading pile, and I will be referring to it during the course of our event on delivering great quality independent advice.
Apparently, investors are not interested in maximum return any more and want to invest for outcomes, a trend which has been accelerated by the scrapping of the need for annuities and the FCA’s increasing focus on advice tailored to a client’s goals, risk tolerance and time horizons.
I question whether the FCA is now more focused on this question than it has been before now, but my bigger problem with this ‘new trend’ is that our clients have always invested for outcomes. People do not want to spend money now for the fun of it, nor just accrue ever bigger pots of money so they can feel richer and richer as the years go by.
They choose to defer the present enjoyment of money in the expectation of a period of time, usually labelled retirement, when their usual sources of income reduce dramatically and when they will want to maintain their preferred lifestyle.
This same expectation is why they choose to spend money on life insurance, critical illness or income replacement premiums. It is the commitment of income or capital to a time when money may not be available in the same quantity and financial products can make up the shortfall.
Those readers who attended my earliest seminars on developing fee-based financial planning may remember my tirades again the Argos catalogue mentality of advising. By this I meant the approach where an adviser’s only value is to help pick products or funds from a catalogue, finding the ‘best’ one in there.
This is not to say that finding the right products or funds is not important, but it is not valued by clients and is a process easily replicated by meerkats, especially if ‘best’ translates to ‘cheapest’ or ‘top-performing’.
Finding the right products or funds is is not valued by clients and is a process easily replicated by meerkatsHelping clients to define what sort of future they want, then helping them define what that means in money terms, calculating a shortfall and recommending how best to bridge the gap is, I thought, what advisers have always done, even if the words and methods have changed over time.
And if, like me, you were taught to “sell the sizzle” then you, like me, have always been advising client to be “investing for outcomes”.
Gill Cardy is network development director of ValidPath
