Prior to the RDR, the industry was predominantly product-sales orientated.
Post RDR, for many financial advisers, the new approach has become ‘holistic’. This means cashflow forecasting, risk profiling and using other hard facts to justify the sale of a product. In some cases the word ‘commission’ has simply been replaced by ‘fee’.
Where do the goals and dreams of the client come into the latter approach? Recently the public has become more educated; the younger generation are researching and buying their own financial products.
Conversely, the life planner will endeavour to explore with clients what is meaningful and indeed identify what they want to achieve within certain timelines. They will partner with the client to achieve this vision.
Will it only be the high-net-worth individuals who pay for a life-planning process? Since we devised our approach in 2010, people of all economic means have been willing to pay a fee for a life planner.
Once trust has been earned and the client understands that the life planner does want to partner with them to achieve their goals, then saving becomes a means to an end.
Many have stated ‘life planning is financial planning done right’. I agree – and where does commoditisation or fee comparison come into this approach?
Peter Skidmore is managing director at Aquarius Wealth Management